Stepwise Guide to understand and mine Ether (Ethereum) in India
Stepwise Guide to understand and mine Ether (Ethereum) in India
With the recent boom of cryptocurrencies lot of people are looking to invest into the system, so here we are with a guide about Ethereum, What is Ethereum, Where you can buy Ethereum and How you can mine Ethereum.
What is Ethereum ?
Ethereum is open software platform which uses blockchain technology like bitcoin which enables software developers to build decentralized applications
How is Ethereum different from Bitcoin?
Both Bitcoin and Ethereum relies on the public blockchain network interface, but Bitcoin can only be used as only peer to peer electronic transaction system that enables online Bitcoin payments in which Blockchain used to track ownership of digital currency (Bitcoin/Ether).
In the other hand, Ethereum blockchain mostly used for the programming code of any decentralized application
Also, Ethereum transactions take way less time to process, so it can be used more on real-time transaction applications like auctions, betting and more.
This all transactions in Ethereum blockchain is power by fuel which is called Ether
Where can you find Ether?
Either can be obtained by guessing/solving specific mathematical equitations, this can be done using running a specific algorithm on a computer, in our case the algorithm is used to mine ether is called Dagger-Hashimoto.
This algorithm can be run on any computer but most preferred method to do is faster is using high power GPUs
Each time you solve the mathematical equation you will be rewarded with ether.
How to buy Ethereum?
Most preferred method of buying Ethereum is Online,
There are few websites in India which allow you to buy and trade Ether from someone who is willing to sell
Here are some online sites where you can buy Ether online :
You need to submit your PAN details and ID proof before you can buy and trade from here.
You can deposit money using online bank transfer only for now, then you can buy and sell ether are current market value.
Here you can buy Ether using your credit of debit card, but you still need to submit your ID proof and card ownership proof (they ask for selfie with card of person you submitted ID of )
Here you can only buy bitcoins but you can convert your bitcoins to Ether easily using any exchange online, for example, Poloniex , Shapeshift
You don’t need any ID of verification to buy bitcoins from this site but stay safe from fraudulent trades, only transfer you money after escrow is confirmed
Most traders allows online bank transfer, but you can also find Paytm, Local hand to hand exchange or other ways in this website
This is also a website similar to local bitcoin in which you can buy and bitcoins and convert them to ethereum later.
It is only app based exchange and requires PAN and ID information before trading
How to store Ethereum?
There are few ways you can store your Ether, one of them is storing locally on mobile or computer
Here are few mobile, computer and Online Ethereum wallets you can use:
All wallets have backup and recovery functionality, make sure to enable and store them carefully, otherwise, in terms of Hardware Failure of Password Loss you will lose you all Ether.
How to Mine Ethereum?
Here is a guide you may find useful:
- Download Ethereum Software
- Setup Ethereum Software
- Download Mining Software
- Setup Mining Software
As I said earlier for mining ethereum you need powerful graphics card to solve those mathematical equation to run that Dagger-Hashimoto Algorithm
Selecting profitable GPU :
Each graphics card has its Hashing value at which it can solve those equation , which is called hashing rate, We will select most preferred GPU which is power efficient with good hashing power
You can check what is the hashing rate of you current GPU here.
After you know the hashing rate of your GPU you can estimate earnings of your graphics card here
Most AMD GPUs with HBM memory architecture is currently most profitable for mining , Most energy efficient once are RX 480 and RX 470.
Each graphics card you invest in have return of investment period , the time in which your purchase value will be returned to with mining , RX480 and RX 470 both have 4 to 5 months of ROI value at the current ethereum rates.
Pool or Solo Mining:
When you start mining on your system you need to receive work from blockchain, when you complete that equation you will receive reward as ether
There are two ways you can do work on blockchain, one is pool mining and other is solo mining
Solo Mining: You have to select a solo mining pool in which you will receive ether when you completely mine 1, if you fail to mine a single ether you won’t receive your pay, this method is preferred if you have higher hash rates in your setup, so you can receive rewards easily
Pool Mining: This is preferred method for small scale mining rig, unlike solo mining group of miners work on a single block to solve the equation and receive rewards as share by share basis, in this method even if you fail to complete the whole block you will receive rewards as per your shared work.
Here are some popular mining pools:
There are two types of mining software you can use to mine, first with GUI which is more user-friendly and good for beginners and there are CLI miners which are more advanced and can be tweaked to get more hash rate out of your system
This kind of software have their on wallets and more streamlined payment system with nice user interface that you can simply run on you system and it simply starts mining
Here are some which offer GUI bases mining:
This type of mining software can be a bit hard at first to run but, It has lot of tweaks which you can use to improve mining. CLI based miners can change the speed of mining, can be remotely operated when you have multiple miners running at the same time.
Here are some CLI based miners:
make sure to change wallet address in.Bat file in mine, or your mining profits might be sent to someone’s wallet
What are the risks ?
There are some risks involved in buying and mining ethereum.
Fist of all, Ethereum is decentralized currency, it’s in not maintained or backed by any government, prices will go up and down based on trades and trust between different people, just like bitcoin ether price can go sky rocket or go downhill anytime.
Second, if you thinking about mining ethereum, this is a new technology which is better than bitcoin but as it gets more popular and more and more miners starts mining ethereum , its difficulty to mine gets harder and harder hence you will receive less ethereum per share, although having more popularity in market prices will also increase so you might receive same rewards but in case of market crash you will lose a lot
Proof of stake is coming soon to ethereum, so instead of proof of work as we can mine ether using our computer will be obsolete with proof of stake, rewards will be given as much you have stake in ethereum, although this switch might be rumored to happen the n last quater of 2017
Calculate your risks and invest your efforts into it, if you have any questions feel free to comment below, Good luck and happy mining
If you are thinking about building a mining rig, we will be posting a build guide so stay tuned.