Stepwise Guide to understand and mine Ether (Ethereum) in India
Stepwise Guide to Understanding and mine Ether (Ethereum) in India
With the recent boom of cryptocurrencies a lot of people are looking to invest in 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 an open software platform that uses blockchain technology like Bitcoin which enables software developers to build decentralized applications
How is Ethereum different from Bitcoin?
Both Bitcoin and Ethereum rely 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 is used to track ownership of digital currency (Bitcoin/Ether).
On the other hand, the Ethereum blockchain is mostly used for the programming code of any decentralized application
Also, Ethereum transactions take way less time to process, so they can be used more on real-time transaction applications like auctions, betting and more.
This all transactions in Ethereum blockchain is powered 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 used to mine ether is called Dagger-Hashimoto.
This algorithm can be run on any computer but a most preferred method to do it 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 that 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 is current market value.
Here you can buy Ether using your credit or debit card, but you still need to submit your ID proof and card ownership proof (they ask for a selfie with a card of the person you submitted your ID of)
You don’t need any ID or verification to buy bitcoins from this site but stay safe from fraudulent trades, only transfer your money after escrow is confirmed
Most traders allow online bank transfer, but you can also find Paytm, Local hand to hand exchange or other ways on this website
This is also a website similar to local Bitcoin in which you can buy 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 a few ways you can store your Ether, one of them is storing it locally on mobile or computer
Here are a 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 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 a powerful graphics card to solve that 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 the most preferred GPU which is power efficient with good hashing power
You can check what the hashing rate of your current GPU is here.
After you know the hashing rate of your GPU you can estimate the earnings of your graphics card here
Most AMD GPUs with HBM memory architecture is currently the most profitable for mining, most energy-efficient once are RX 480 and RX 470.
Each graphics card you invest in has a 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 the blockchain, when you complete that equation you will receive a reward as ether
There are two ways you can do work on blockchain, one is pool mining and the other is solo mining
Solo Mining: You have to select a solo mining pool in which you will receive ether when you are 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 the preferred method for small-scale mining rigs, unlike solo mining group of miners, who work on a single block to solve the equation and receive rewards on 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 has they’re own wallets and a more streamlined payment system with a nice user interface that you can simply run on your 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 a lot of tweaks that you can use to improve mining. CLI-based miners can change the speed of mining and can be remotely operated when you have multiple miners running at the same time.
Here are some CLI-based miners:
make sure to change your 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.
First of all, Ethereum is a decentralized currency, it’s not maintained or backed by any government, and prices will go up and down based on trades and trust between different people, just like Bitcoin ether price can skyrocket or go downhill anytime.
Second, if you think about mining Ethereum, this is a new technology that 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 some rewards but in case of a 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 rumoured to happen the n last quarter 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.