Contrary to popular belief, not all Ethereum mining software is created equally. Differences in speed, cost, and functionality all play a role in mining profitability. This makes it extremely important to understand Ethereum mining software programs, their role in the mining process, and how to best utilize them for mining the Ethereum blockchain successfully.
When most people think about mining Ethereum, their main concern is what hardware to purchase. Yes, hardware such as AMD or NVidia graphics cards are important to the mining process, but most miners completely disregard mining software as an integral part of achieving mining profitability.
Anyone can download and access the data from the Ethereum blockchain, but it takes additional software to begin mining. Mining software is used for CPU and GPU mining to interface with the Ethereum blockchain and begin successfully mining new blocks. The software itself helps to run the hashing algorithm required for the Ethereum blockchain. This algorithm is necessary to solve the computational puzzles needed in unlocking new blocks, and thereby collecting Ether in return. Computer and graphics hardware need the correct information to understand how to solve the hashing algorithm, which makes software a necessary piece of the puzzle.
The Ethereum Switch: PoW to PoS
As it becomes clearer that a proof-of-work (PoW) consenus mechanism uses excessive amounts of electricity and power, many blockchains have explored moving to new consensus models. Ethereum is in the works of developing a proof-of-stake (PoS) model which will achieve consensus based on token holders in the network.
For the time being, Ethereum is maintaining its PoW mechanism, while slowly moving to a PoW model. It is likely the network will operate on some sort of dual-mechanism system where both PoW and PoS are utilized to achieve the best security possible. No one knows how this will play out in the furture, and it is likely Ethereum mining software programs will have to continue to alter their functionality based on the direction of the Ethereum network.
It’s All About Speed
When it comes to mining Ethereum, speed is the name of the game. That is because the speed with which a miner can solve the computational puzzle provided determines the likelihood they will be rewarded in Ethereum tokens.
Mining speed is determined not only by the hardware being used, but the software as well, which acts as the go-between from the hardware to the Ethereum blockchain.
Mining speed is measured in what is called hashing rate, or, the amount of computations which can be completed in a given amount of time. This rate is measured in hashes, or the amount of times per second a miner can attempt to find the solution for the computational puzzle of a block on the blockchain. Currently, hashing power is measured in mega-hashes per second (MH/s) which is equivalent to 1,000,000 hashes per second. The higher the hashing rate, the more likely the miner is to solve a block and earn ether.
As the sum total of all hashing power on the Ethereum blockchain continues to grow, so will the need to increase hashing speed by individual miners and mining pools. Mining software does play a role in the hashing rate for miners, and therefore will always be an important choice.
Key Questions to Ask Before Downloading Software
Luckily, mining the Ethereum blockchain can be a straightforward, simple process. Still, there are several things to consider before downloading and installing Ethereum mining software and getting started. These questions will help when it comes to making the decision on which is the best Ethereum mining software.
Is the Software suited to mine the Ethereum blockchain?
Mining software programs are not compatible across blockchains. Generally, a mining program is designed specifically to mine a given blockchain based on its hashing algorithm. There are some software programs which allow for the mining of multiple blockchains at the same time, or to switch between blockchains easily depending on the forecasted profitability for a given chain. As a baseline, to mine the Ethereum blockchain the software program must be utilized with the Ethash hashing algorithm utilized by Ethereum.
What kind of hardware am I operating?
Because mining the Ethereum blockchain is ASIC-resistant, it requires the use of CPU or GPU hardware. These hardware categories function and interface differently with software. Some hardware is pre-built with mining software which doesn’t need any additional program installation, although most hardware solutions will still need to run a mining program.
What is my Operating Software?
Much like other programs, an Ethereum mining program may only be suitable for a certain operating software. Ethereum mining on Windows or Linux will have different software options than Ethereum mining on a Mac. As a general rule, most mining software programs allow for Linux Ethereum mining, while Mac Ethereum mining software is much harder to find. Check the specifications for the software program before attempting to install.
What are the Software fees?
As with most things, nothing in this business is free, and Ethereum mining software often comes with an associated cost. This fee can generally range from 1-2% depending on the software provider. However, some software programs for mining are completely free, although they may not be the most efficient or fastest for mining purposes. The software fee will help determine how much it will cost to utilize the software itself, but must be considered alongside other factors.
Do you want to Mine alone, or in a pool?
Solo mining, which is conducted completely separate from any mining pool, is done by connecting directly to the Ethereum blockchain. However, if mining is done via a mining pool, the user will have to connect to the pool in order to successfully integrate themselves into the group’s collective hashing power.
These days, most miners pool together to scale hashing power and share in the rewards. Many industry experts believe mining in a pool is the only way to achieve profitability in the industry. As it relates to software, some Ethereum mining programs are only of use in conjunction with pools, while other software can be used in pools or in solo mining.
Is the software kept up-to-date?
Changes in the Ethereum blockchain can have radical impacts on the process of mining. This includes changes to mining difficulty, hashing algorithm, consensus mechanism, and more. Ethereum mining software should be updating its package in-line with changes to the Ethereum blockchain.
There are several ways to check if a software program is being kept up-to-date. First, if the software is open-sourced, check its Github for release dates and updates. There should be a fairly consistent flow of updates to the software within recent months or at least the past year. If the software is not open-sourced, check out online forums and sites to get a sense from users how the software is operating in the current Ethereum blockchain. The mining community is quite small and is very open to providing feedback on the status of software.
Although there is only one Ethereum blockchain, there are many software options for mining. Choosing the right software can be an important part of achieving profitability mining, as factors such as cost, speed, and compatibility all play a role in which software to choose. The following is a list of software options for mining the Ethereum blockchain:
Possibly the most well-known Ethereum mining software, Ethminer is a straightforward mining options without all of the bells and whistles. Because Ethminer can be downloaded via Github and has no flashy website it can be intimidating to those who don’t have a background in technology.
The biggest benefit with Ethminer is being open-sourced, and therefore free for all users. The open-sourced nature of Ethminer also allows anyone to view the software code and ensure all developers are playing by the rules and miners are being treated fairly. The software can be used to mine any coin which relies on the Ethash Proof-of-Work consensus mechanism. Ethminer operates with both AMD and NVIDIA drivers on Windows or Linux, but cannot be used with CPU hardware.
Some users claim Ethminer is not as fast as its competitors, and results in lower hashing rates for its end users. However, because it is open-sourced and completely free, Ethminer has a strong place among miners in the industry.
This mining software was specifically designed for use with GPU mining equipment like NVIDIA and AMD hardware. Be careful that your GPU is listed on the software specifications here, as Claymore’s software isn’t necessarily optimal for any hardware. It also only operates with Linux and Windows operating systems.
Claymore allows for dual-mining, a feature which allows the user to mine multiple blockchains at one time. This could potentially bring more profits if other cryptocurrencies are easier to mine, as those tokens can be directly sold for Ethereum. The fee for using Claymore is 1% for mining Ethereum, and 2% if the user activates the dual-mining function.
Designed for use on Windows, WinEth is an open source mining software for Ethereum with a 1% fee which is fairly standard for the industry. It provides an auto-configuration algorithm which helps to optimize mining performance. It is important to note that miners who use WinEth are automatically pooling their hashing rate with NanoPool or Ethermine, two of the biggest Ethereum mining pools.
The interface is simple and straightforward, without any command-line knowledge necessary, making it more user-friendly than many other mining software packages. WinEth suggests using NVidia or AMD graphics cards with at least 3GB of memory, although 4GB is optimal.
Phoenix Miner is a relatively new mining software in relation to its competitors. Unlike many of its competitors, Phoenix Miner brings with it a small fee of about 0.65%, which should be enticing to most users and will aid in increasing mining profits.
According to its developers, Phoenix Miner is faster than Claymore by 0.4-1.3%, which amounts to a significant improvement in the long-run. The software supports Linux as well as AMD and NVidia drivers. Users can easily switch from Claymore to Phoenix, as Phoenix supports most of Claymore’s command-line functions.
For anyone with a Mac, Minergate is one of the only mining software programs on the market. It allows for mining Ethereum as well as multiple other blockchains such as Bitcoin, Dash, Monero, and more. Minergate is not only a software, but a mining pool as well, and all users of the software program do so in conjunction with the Ethereum Minergate pool.
The software is designed to support NVidia cards with at least 2 GB of RAM. With a nice interface which doesn’t require using command line, a low 1% fee, and withdrawals as little as 0.1 ETH, Minergate is a solid choice for Mac users.
Stay Away From Cloud Mining
In recent years, there has been a trend towards cloud mining services. This type of mining allows a user to simply pay a subscription fee to outsource all mining operations to a third party, and in return receive a share in the profits. Cloud mining seems like a great option for diving into the mining industry with little to no knowledge, but it has proven to be a flawed system.
For one, users who pay for cloud mining services have no control over their mining equipment or tokens. There is no transparency in the industry, so users are left to trust third party companies are operating fairly and reporting mining statistics accurately.
On top of this, cloud mining platforms have displayed a propensity for fraud and illegal activity. Many providers have been caught stealing cryptocurrency from its customers as well as operating as ponzi schemes. For these reasons, it is best to stay away from cloud mining providers at all costs.
Mining Software Matters
Ethereum mining can be extremely profitable, but it takes time and effort to understand mining and what software is best suited for mining successfully. There are many factors which go into the choice of an Ethereum mining software. Determining not only which software will provide the best speed and profitability is not the only factor, as compatibility and hardware requirements will likely also play a role in the ultimate decision.
Choosing the best Ethereum mining software is a great step on the path to mining profitability.