There can also be a pool of pools, to further enhance output. Successful identification of the block hash leads to reward for the pool, which is then shared based on the pool shares mechanism. There are two kinds of shares — accepted and rejected. Accepted shares indicate that work done by a pool member is contributing substantially towards discovering new cryptocoins, and these get rewarded.
Rejected shares represent work that does not contribute to a blockchain discovery, and hence are not paid for. A pool member ideally wants all their shares to get accepted. Pool members are rewarded based on their accepted shares that helped in finding a new coin block. A share has no actual value, and it simply acts as an accounting method to keep the reward distribution fair.
Based on the accepted shares, members get rewarded using different methods, which include the following:. Before deciding to join a particular pool, miners should pay attention to how each pool shares its payments among members and what fees, if any, it charges. With mining becoming increasing popular aided by high-speed devices compatible with home computers, the chances of realistically profiting from individual mining are diminishing.
Most individuals opt to join a mining pool which allows them high-probability limited profits, instead of low-probability high profits. Investing in cryptocurrencies and other Initial Coin Offerings "ICOs" is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions.
Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. Coin Central. Your Money. Personal Finance. Your Practice. Popular Courses. Investing Cryptocurrency. Table of Contents Expand. Table of Contents. Understanding the Mining Process. Functions of a Mining Pool. The Bottom Line. Article Sources. Investopedia requires writers to use primary sources to support their work.
These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. Compare Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear.
Investopedia does not include all offers available in the marketplace. Related Articles. Bitcoin How Bitcoin Works. Partner Links. The combined hashrate of the mining pool is what determines which pool performs better. Larger pools have a higher probability of creating blocks due to their larger computing power, while smaller ones generally take longer.
A mining pool's size can also reflect its trustworthiness to some extent. For example, many active miners in a pool suggest that the pool and its management are trusted. Once you've weighed the attribute of different mining pools, you should be reasonably comfortable picking out the one that works for you—and your budget.
It's important to note that you can join a mining pool armed only with your personal computer if it has a compatible GPU, but gains will be much slower. If you're only looking for a few dollars a month to spend, GPU mining is an acceptable way to use equipment you already have for small rewards—and a mining pool can help you increase those rewards if you choose your pool carefully. Choose your pool based on your criteria and add the stratum address in your software.
Then, connect your wallet, configure your client, and start mining. Yes, you can. However, joining a pool is a much more profitable way to mine Bitcoin, especially since its difficulty increases with every coin awarded.
To be competitive, it's best to join a pool unless you have the resources to create your own or buy multiple state-of-the-art ASIC miners. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein.
Your Money. Personal Finance. Your Practice. Popular Courses. Part of. Guide to Bitcoin. Part Of. Bitcoin Basics. Bitcoin Mining. How to Store Bitcoin. Bitcoin Exchanges. Bitcoin Advantages and Disadvantages. Bitcoin vs. Other Cryptocurrencies. Bitcoin Value and Price. Table of Contents Expand. Table of Contents. Choose Your Mining Pool Equipment. Ensure Transparency. Review the Pool Payout Scheme. Look for Mining Pool Stability. Review the Pool Fees. Choose Your Mining Pool. Key Takeaways You may need to buy specialized, expensive equipment to compete in a mining pool.
It's important for mining pools to be fair in work assignments and transparent in their operations. Payout and fee schemes are essential because they can eat into your profits. The combined mining pool hashrate is more important than its size, but the size of the pool also helps you gauge its trustworthiness. Can Anyone Join a Mining Pool? Anyone that has the equipment and a desire to mine cryptocurrency can join a mining pool.
Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
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These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. This gigantic data structure containing all the accounts and the intermediate cryptographic proofs is called the state trie. Ok, so why does this pose a problem? This trie data structure is an intricate interlink of hundreds of millions of tiny cryptographic proofs trie nodes.
To truly have a synchronized node, you need to download all the account data, as well as all the tiny cryptographic proofs to verify that no one in the network is trying to cheat you. This itself is already a crazy number of data items. The part where it gets even messier is that this data is constantly morphing: at every block 15s , about nodes are deleted from this trie and about new ones are added. This means your node needs to synchronize a dataset that is changing times per second.
But until you actually do gather all the data, your local node is not usable since it cannot cryptographically prove anything about any accounts. You are just done with the block download phase and still running the state downloads. You can see this yourself via the seemingly endless Imported state entries [ The reason is that a block in Ethereum only contains the state root, a single hash of the root node. When the node begins synchronizing, it knows about exactly 1 node and tries to download it.
A: As explained above, you are not stuck, just finished with the block download phase, waiting for the state download phase to complete too. This latter phase nowadays take a lot longer than just getting the blocks. The state trie in Ethereum contains hundreds of millions of nodes, most of which take the form of a single hash referencing up to 16 other hashes. This makes any underlying database weep, as it cannot optimize storing and looking up the data in any meaningful way.
The end result is that even a fast sync nowadays incurs a huge disk IO cost, which is too much for a mechanical hard drive. A: Unfortunately not. You however should be able to run a light client on an HDD with minimal impact on system resources. If you wish to run a full node however, an SSD is your only option.
Why does this error appear? You can change this behavior with a PowerShell command like echo "mypasswordhere" out-file test. Toggle navigation Go Ethereum.
We'll answer those questions as best we're able, and bring up other concerns and related information that you might not have considered. Hopefully, by the end of it all, you'll be better informed. The easiest way to get started at mining is with NiceHash. Prior to NiceHash, getting started with coin mining was more complicated — as we'll detail below. NiceHash has greatly lowered the barrier to entry, and it gets rid of some of the worries about what coin s to mine.
You effectively lease your PC's hashing power to other users, who get to choose what to mine, and you get paid in Bitcoin. NiceHash takes a small cut of the potential profits, and your PC can be up and mining in minutes. Note: There are some alternatives to NiceHash, but generally speaking they function on similar principles. Some just mine the "most profitable" coin at any given time, and you keep those coins or fractions of a coin. If a coin ends up becoming popular and shoots up in value, you could score big, but it can also go the other way and you end up with a bunch of worthless crypto.
We're not going to walk through every step of the process, as NiceHash already has multiple tutorials. The short summary is that you need to register with the service, and you should have your own Bitcoin wallet somewhere e. Your BTC will accumulate on NiceHash, and you can transfer it out whenever you like — which is a good idea since you never know if or when another successful hack might occur. NiceHash has several options, ranging in degree of complexity.
The easiest is to use the new QuickMiner , which is a web interface to a basic mining solution. You download the QuickMiner software, run that, and the webpage allows you to start and stop mining — you don't even need to put in your BTC address. It's dead simple, though the numbers can fluctuate quite a bit.
Except, after letting both versions run for a bit, QuickMiner seemed to stabilize at the same performance level as NiceHashMiner. Next up is NiceHash Miner , which is what most people will want to use. It's more complex in some ways than QuickMiner, but it has more options that can improve overall profitability. By default, it will ask you to log in using your NiceHash account details.
Once launched, the first time it runs, NiceHash Miner will benchmark your hardware using various common mining hashing algorithms. Which algorithms and software get tested varies a bit by your GPU, and you can customize things quite a bit. Right now, DaggerHashimoto aka, Ethash, what Ethereum uses — a modified variant of DaggerHashimoto tends to be the most profitable, though sometimes Octopus, Kawpow, or some other algorithm might climb to the top.
The idea is that NiceHash Miner will choose whatever is currently the most profitable coin to mine, based on what people are willing to pay to rent your hardware. Sometimes a new coin will launch, or someone will want to dedicate a lot of mining power at a specific coin, and they'll pay more to do so.
The initial benchmarks on NiceHash Miner can be a bit prone to error, unfortunately. That's because the tests are only run for a minute each, and as your GPU heats up it may also slow down. That means the first algorithm benchmarked often ends up with an inflated result. You can get a better estimate of performance by using the Precise mode on the benchmark tab , which takes twice as long to benchmark. You can also schedule an algorithm for retesting if you think the result is off, and by default it can be turned off NiceHashMiner will periodically download new versions of the miners and automatically retest.
This is a custom Linux installation that would run in place of Windows, and it's recommended for larger scale mining farms that use NiceHash. As with all things Linux, getting it up and running may require a bit more knowledge and patience, but because it's an OS tuned specifically for mining, hash rates can be higher. We didn't do any of our testing with NiceHash OS, due to time constraints.
There are two big downsides to mining via NiceHash. One is that you're not actually getting Ethereum — not directly, at least. You'll get paid in Bitcoin, which you can then trade for Ethereum if you want. That's not necessarily a bad thing, considering BTC is the largest of cryptocoins, but if you want ETH you'll need to take some extra steps. The other downside is that NiceHash takes a cut of the amount paid, and the net result is generally lower payouts than mining Ethereum yourself.
How big is the difference? That's a pretty big mining fee, though again the ease of use with NiceHash is hard to overstate. Transitioning over to a mining pool instead of NiceHash opens up more opportunities, to both software and method of payment. The first choice is what mining pool to use. Generally speaking, you'll get more stable income by going with the largest pool, but there are various reasons for not doing that. Most of those reasons are altruistic, like not wanting any one pool to control too much of the total network hash rate, so our advice is to go with a larger pool.
Google is your friend. After choosing a pool, you'll need to set up your account, choose which mining software you want to run, and then configure your launch settings. That's simplifying several steps, all of which can vary quite a bit depending on which pool you use. Free pools tend to be less reliable, since it costs money to run the servers and infrastructure for a pool, so it's often better to pay a small fee rather than deal with the potential downtimes.
Also pay attention to the payout scheme and payout requirements for the pool. Most pay out your Ethereum daily, provided you've hit minimum quotas, but some of those quotas are pretty high. For example, Ethermine. It also pays out weekly if you hit at least 0. The payout schemes meanwhile are designed to discourage pool hopping i.
One big difference between NiceHash and your typical mining pool is that you need a separate Ethereum wallet to store your coins — you really don't want to just leave the coins with the pool indefinitely. While it's technically possible to have your coins transferred to somewhere like Coinbase, it's generally best not to have mining pool payouts go directly to a trading platform.
We recommend setting up an online wallet, through a service like MyEtherWallet , and use that address for your pool payouts. PSA: Don't use the same password on any sites related to cryptocurrency mining. Create a unique password on each one consider using LastPass or a similar product , and if you're planning to hold onto the coins for the long haul, get them into your own wallet.
Once everything is in place, you can finally launch your miner. A lot of the miners have sample configurations for popular pools that you can edit, and the pool itself will have configuration details on how to connect. So as an example, launching T-rex mining with Ethermine looks like this: t-rex.
Most modern miners accept a similar syntax, so tweaking the mining command isn't too complicated. Here's the catch: NiceHashMiner has a bunch of extra features to allow remote monitoring, notifications if a miner goes offline, ability to run a script if something appears wrong, etc. Doing all of that with pool mining requires more time and effort, which is why a lot of people are willing to take a bit less in the way of coins.
No, seriously, it's not worth the hassle and you almost certainly won't actually get any coins — at least not with Ethereum or Bitcoin. Statistically, your chances of solving a block are equal to your percentage of the total hash rate of the network. The proof of stake transition makes any such talk completely irrelevant. In practice, the mining pools have a much higher chance of solving and getting credited with a block. How much is a single block worth?
There's a static block reward of 2 ETH right now, plus transaction fees that currently average around 2 ETH, plus some 'uncle' rewards that are relatively small by comparison. Basically, 3. For all but the most dedicated of mining operations, the steady payouts that come from joining a mining pool are a far safer approach. But let's say you still want to try solo mining. What do you need to do? First, you have to set up an Ethereum wallet and download the Ethereum blockchain.
Even after pruning a bunch of extra data that you don't need, it's still typically around GB in size, and downloading can take quite a while. Once your wallet is synced up, you can point your own mining rigs at your local node, which is mostly the same as configuring miners for a mining pool except now you're using your own pool.
You're now flying solo. Even with a lot of high-end GPUs, you likely won't mine any Ethereum before proof of work mining ends. The theoretical benefit to solo mining is that you get the whole block reward plus fees, with no percentage going to the pool.
The downside is that without a massive farm, you'll very likely end up getting nothing. There are however mining pools that operate on a 'solo' mining approach. Basically, the whole pool works together to find a block solution, which means it's more likely to get incorporated as the 'winning' block, but only the participant mining address with the highest contributions to date since the last credited block gets the reward.
This is much easier to use than pure solo mining, but without a decent amount of hashing power it will take quite some time to reach the point where you get the rewards from mining a block. That covers how to get started, but we're far from done. With the above information, you can now fire up your PC and begin mining. That's the good news. The bad news is that actual long-term profitability is far less clear cut. The real difficulty is predicting where cryptocurrency will go next.
Both Bitcoin and Ethereum are down significantly from their highest ever valuations, but there's still a lot of up and down movement. Maybe it will bounce back, maybe it was a bubble. Who's right? Depending on when you look, you'll find ample data-driven support for just about any opinion. The most important thing to keep in mind is that cryptocurrencies are volatile.
It doesn't matter if you're treating them like a commodity and day trading, or mining, or running a mining pool. Things are in a constant state of flux. Just look at the price of Ethereum since it launched back in Note: The following charts were last updated in March, but the patterns outlined here have continued.
We've got the linear chart, which includes an amazing spike at the right edge early That spike looks very similar to the one that occurred in , naturally, and we should maybe just ignore the equally dramatic crash in — or that's what the optimistic miners seem to think. The logarithmic chart doesn't look nearly as impressive, and it's clear the real winners with Ethereum are the people who got in back in , or even Incidentally, about two thirds of all Ethereum was actually part of a 'pre-mine' that went to 'investors' before mining was even possible.
Everyone joining the bandwagon now clearly missed the best part of the ride. Alternatively, there's plenty of room left for future growth and spikes, but that's just speculation. We've passed peak profitability for mining Ethereum, at least for the time being. That's where the HODL hold mentality comes into play. There's another way to look at Ethereum mining. In , you would have accrued an additional Ether — twice the time mined, a bit more than half the rewards.
From up until today, mining has been far less compelling, and it's becoming increasingly so. The point is that you either got in early and made big gains, or you're hoping that things will continue to go up. And if that's your belief, why not just invest in Ethereum directly rather than trying to build a mining farm? Do a quick search for the optimal mining settings on a particular GPU and you're sure to find a bunch of diverging opinions.
PoW miners have to use their computational resources to solve hashes to verify transactions. It is done to prevent double-spending. Proof of Work also helps you to ensure that the network functions without relying on any third party or middleman. Some of the Proof-of-Work functions miners execute include puzzles, integer factorization, merkle tree-based puzzles, hash sequences, and functions.
The completion of these activities helps in producing blocks, after which the network rewards the miners. How much money an Ethereum miner makes depends on several costs, including electricity consumption, fees, or the cost of hardware being used. Depending on the type of processes and hardware used, there are several different ways you can mine Ethereum. We will now cover each of them briefly. The decision you make will be based on key factors, such as whether you are willing to own a mining rig, or how much you intend to initially invest.
Particularly, it will also depend on the following factors:. However, one of the best ways that experts believe one can mine Ethereum is through an Ethereum mining pool. Pool mining Ethereum allows you to lower the volatility of your payouts. This is done by offering you smaller but more frequent payouts instead of a lump sum amount that you receive only after a block has been solved. Always try to choose a mining pool that provides you with the lowest fees and reliable terms.
So before you start mining, you need to look at the software requirements and the operating system you need. You will need. To choose appropriate mining software for Ethereum , check the following criteria to take your final decision:. Thus, joining a mining pool is the preferred way of making more money while mining Ethereum. The next step involves installing a driver for your graphics card.
If you have an AMD graphics card, you can download the driver from here. Alternatively, in case you have an Nvidia graphics card, you can download their latest drivers from here. The first thing you need to do is to join a mining pool. By using a mining pool, you are sharing resources which lowers the cost of running mining rigs. Depending on the quality and structure of the mining group, you chances of finding a block are massively improved. For this guide, we have chosen Ethermine because it is arguably the most popular mining pool.
To join the mining pool, all you need is your wallet address. There is no need to sign up which allows you to mine anonymously. You can choose a software or hardware wallet depending on your preferences. Security should be your priority while choosing the best Crypto wallet. You can select any cryptocurrency wallet that supports Ethereum. For this guide we decided to use Coinbase.
The next step is to select mining software. EasyMiner and Ethminer are two good examples. We are going to use Ethminer for this guide, which you can simply download from Github. To start the mining process, you need to create a BAT file. Go ahead and use that setting. Start by copying it from the website. Navigate to the directory where you have download the Ethminer software from Github. Name the file as startmining. Paste the above-copied information from the site into the batch file.
For this guide, we are using Asia as a main server and EU as a back up server. Cope the information as shown above from the site and paste it in the BAT file as shown below. Next, input your Ethereum Wallet address where you receive your mining fee. Follow this by a dot and your mining machine name. Once you execute the batch file to start mining, it will take about two minutes. Once you see the hash rate appear on the console, the process has begun.
Although pool mining is the most profitable method of mining Ethereum, many people still want to use their GPUs to mine. The following guide will help you begin mining using your GPU. There are many mining clients you can download.
You can download it straight from their official website. After installation is complete, launch the program. Next, click on register to begin the mining process. This dispels any doubts on whether the machine is powerful enough to mine ethereum.
Now you can get payouts in the Ethereum pool for free every day even if you have only one graphics card. Also, Nicehash and other mining rental. It also pays out weekly if you hit at least ETH and every 14 days if you've accumulated at least ETH. The payout schemes meanwhile are. Finally, while it may seem like your best bet is to have your ETH mining rewards sent to your CoolWallet S or Ledger Nano S address, you should.