Notice Becoming a miner is not recommended. Ethereum is going to transition to proof-of-stake, making mining obsolescent. Becoming a miner would involve investing in a mining rig (several GPUs, plus maybe other hardware if needed, like a compatible computer), which is unlikely to get a return on investment before PoS is implemented. Introduction The word mining originates in the context of the gold analogy for crypto currencies. Gold or precious metals are scarce, so are digital tokens, and the only way to increase the total volume is through mining it. This is appropriate to the extent that in Ethereum too, the only mode of issuance post launch is via the mining.

As more miners join the Ethereum network, the harder it becomes to solve the problem, which leads to an increase in the mining difficulty. This is why it’s currently costly to mine Ethereum. The returns are very low and equipment is still pretty expensive. However, as Ethereum price continues to rise, it could become worthwhile in the future.

Unlike these examples however, mining is also the way to secure the network by creating, verifying, publishing and propagating blocks in the blockchain. • Mining Ether = Securing the network = verify computation So what is mining anyway? Ethereum Frontier, like all blockchain technologies uses an incentive-driven model of security. Consensus is based on choosing the block with the highest total difficulty. Miners produce blocks which the others check for validity.

Among other well-formedness criteria, a block is only valid if it contains proof of work (PoW) of a given difficulty. Note that in Ethereum 1.1, this is likely going to be replaced by a proof of stake model.

The proof of work algorithm used is called (a modified version of ) involves finding a nonce input to the algorithm so that the result is below a certain threshold depending on the difficulty. The point in PoW algorithms is that there is no better strategy to find such a nonce than enumerating the possibilities while verification of a solution is trivial and cheap. If outputs have a uniform distribution, then we can guarantee that on average the time needed to find a nonce depends on the difficulty threshold, making it possible to control the time of finding a new block just by manipulating difficulty.

The difficulty dynamically adjusts so that on average one block is produced by the entire network every 12 seconds (ie., 12 s block time). This heartbeat basically punctuates the synchronisation of system state and guarantees that maintaining a fork (to allow double spend) or rewriting history is impossible unless the attacker possesses more than half of the network mining power (so called 51% attack). Any node participating in the network can be a miner and their expected revenue from mining will be directly proportional to their (relative) mining power or hashrate, ie., number of nonces tried per second normalised by the total hashrate of the network. Ethash PoW is memory hard, making it basically ASIC resistant. This means that calculating the PoW requires choosing subsets of a fixed resource dependent on the nonce and block header. This resource (a few gigabyte size data) is called a DAG.

The is totally different every 30000 blocks (a 100 hour window, called an epoch) and takes a while to generate. Since the DAG only depends on block height, it can be pregenerated but if its not, the client need to wait the end of this process to produce a block. Until clients actually precache dags ahead of time the network may experience a massive block delay on each epoch transition. Note that the DAG does not need to be generated for verifying the PoW essentially allowing for verification with both low CPU and small memory. As a special case, when you start up your node from scratch, mining will only start once the DAG is built for the current epoch. Mining Rewards Note that mining 'real' Ether will start with the Frontier release.

On the Olympics testnet, the, the ether mined have no value (but see ). The successful PoW miner of the winning block receives: • A static block reward for the 'winning' block, consisting of exactly 3.0 Ether • All of the gas expended within the block, that is, all the gas consumed by the execution of all the transactions in the block submitted by the winning miner is compensated for by the senders. Litecoin LTC Mining Guide. The gascost incurred is credited to the miner's account as part of the consensus protocol. Over time, it's expected these will dwarf the static block reward. • An extra reward for including Uncles as part of the block, in the form of an extra 1/32 per Uncle included Uncles are stale blocks, ie with parent that are ancestors (max 6 blocks back) of the including block.

Valid uncles are rewarded in order to neutralise the effect of network lag on the dispersion of mining rewards, thereby increasing security. Uncles included in a block formed by the successful PoW miner receive 7/8 of the static block reward = 2.625 ether A maximum of 2 uncles allowed per block. Ethash DAG Ethash uses a DAG (directed acyclic graph) for the proof of work algorithm, this is generated for each epoch, i.e every 30000 blocks (100 hours).

The DAG takes a long time to generate. If clients only generate it on demand, you may see a long wait at each epoch transition before the first block of the new epoch is found. However, the DAG only depends on block number, so it CAN and SHOULD be calculated in advance to avoid long wait at each epoch transition. Geth implements automatic DAG generation and maintains two DAGS at a time for smooth epoch transitions.

Automatic DAG generation is turned on and off when mining is controlled from the console. It is also turned on by default if geth is launched with the --mine option. Note that clients share a DAG resource, so if you are running multiple instances of any client, make sure automatic dag generation is switched on in at most one client. To generate the DAG for an arbitrary epoch: geth makedag For instance geth makedag 360000 ~/.ethash. Note that ethash uses ~/.ethash (Mac/Linux) or ~/AppData/Ethash (Windows) for the DAG so that it can shared between clients.

The Algorithm Our algorithm, (previously known as Dagger-Hashimoto), is based around the provision of a large, transient, randomly generated dataset which forms a DAG (the Dagger-part), and attempting to solve a particular constraint on it, partly determined through a block's header-hash. It is designed to hash a fast verifiability time within a slow CPU-only environment, yet provide vast speed-ups for mining when provided with a large amount of memory with high-bandwidth.

The large memory requirements mean that large-scale miners get comparatively little super-linear benefit. The high bandwidth requirement means that a speed-up from piling on many super-fast processing units sharing the same memory gives little benefit over a single unit.

Formal Requirements TODO: Content from formal requirements doc. Design Decisions Taken TODO: Content from design decisions doc.

Infrastructure Overview Mining will be accomplished in one of two ways: either on CPU (and possibly the GPU, to be confirmed) with the Mist client or on the GPU though a combination of the Ethereum daemon and. An sgminer module for Ethash is expected to be released at some point during, but not necessarily before the Frontier Genesis. JSON-RPC Communication between the external mining application and the Ethereum daemon for work provision and submission happens through the JSON-RPC API. Two RPC functions are provided; eth_getWork and eth_submitWork. These are formally documented on the wiki article.

If you are thinking of getting into Eather mining and start building an expensive rig then dont, soon in a few months you will not be ble to mine anymore. PoS will take over and mining will no longer be possible. PoS stands for Proof Of Stake, meaning people that hold Ether can do so called staking where they deposit their coins into a 'staking vault' and receive fees for confirming transactions on the network. That works via a consensus algorithm.

My recommendation: Its too late to get into mining, instead buy Ether now with that money and you will make much more money. The required amount for staking is RUMORED to be 1500. But if you allready have a few AMD cards laying around, then you can at least mine some Ether for now.but dont og out buy expensive equipment now. The party is already over and the only way to make money with Ether is to buy ether as an Investment and hold on to it for future gains in price. Good Luck Servercookie. I am seriously not trying to troll anyone, just informing people if the coming change. The majority of the suggestions here are pretty vauge and cryptic, and no one is giving anyone a clear answer.

The simple fact is that mining will stop soon and then you will sitt there With a lot of shinny Cards you have to mine something else With. If you can find a profitable alt coin that is. I was seriously thinking of getting into mining myself. But buying equipment for 5k and only being able to mine for a few more months is not such a great Investment idea.

Not if you want a ROI I have read the blog, and the conclusion is fairly simple. We are now in PoW and are able to mine, once PoC starts then mining will stop.simple as that really. For those who have allready bought Equipment then mine as its the last day on Earth and hope you recoup the Investment.

OP Is trolling but does make a point or two. At the rate people are moving to mining it will surely be destroyed in a month or two. I have yet to see anything come out of ether beside sergei's ethereum doubler (fraud ponzi russian scam) and augur, which is nothing special anyway and could have been implented with other crypto currencies. When it does go to POS what will the network be doing besides facilitating ether transfers and students trying to start their own coin??

Problem with BTC >>chinese took over with asic and 1cent power and BTC diff grew 10x the rate of BTC price. Result = dead network with bad price point. Problem with Ether >>1.2 million miners wanting another bitcoin when it isn't going to be that, too many miners, too fast growth with no application or useful purpose relative to cost How am i trolling, are you seriously thinking you will be mining once PoC comes out.

I would love to see you doing any ether mining at that point. Feel free to prove me wrong, just read the eutherum blog.

Problem with Ether >>1.2 million miners wanting another bitcoin when it isn't going to be that, too many miners, too fast growth with no application or useful purpose relative to cost Right, while I believe in Ethereum in the long run, but it should be pretty obvious the price is buoyed by pure speculation at this point. Not to say this is uncommon in crypto, it's just Ether is not backed by anything sustainable right now. Despite this, the mining profits right now are insane. We can all enjoy that for the time being. Yes, mining 'right now' is great which is why we're seeing an explosion of farms. If anyone cares to calculate how much some people have made of Ether's 3000% increase in the past 3 months and what this means, then it's kinda obvious how much capital the wiser early adopters have to sink into this.

Further consider that Ethereums market cap ATM is just a shard under $1b from an origional $19m crowd fund. People still have that money to spend, and obviously some are spending it on huge GPU farms. Because of this, mining profits in a months time will probably crash out with the diff explosion. It really has nothing to do with POS. POS and POW will both be running in Serenity up until Metropolis which I believe intends only to run POS.

OP is not trolling, just inexperienced and not fully aware of the more likely factors that threaten our POW returns. Yes, mining 'right now' is great which is why we're seeing an explosion of farms.

If anyone cares to calculate how much some people have made of Ether's 3000% increase in the past 3 months and what this means, then it's kinda obvious how much capital the wiser early adopters have to sink into this. Further consider that Ethereums market cap ATM is just a shard under $1b from an origional $19m crowd fund. People still have that money to spend, and obviously some are spending it on huge GPU farms. Best Computer Case For DigiByte DGB Mining more. Because of this, mining profits in a months time will probably crash out with the diff explosion. It really has nothing to do with POS.

POS and POW will both be running in Serenity up until Metropolis which I believe intends only to run POS. OP is not trolling, just inexperienced and not fully aware of the more likely factors that threaten our POW returns some people like to buy and sell, some like to 'mine' as well. From the initial investors perspective, if you are selling out of eth, what will you buy? I bought eth directly when it was inexpensive (up to 0.008 BTC/eth), but now I want to mine instead of buying because mining insulates you against price volatility somewhat. I have spent whatever i can spend and or have electricity/AC for during spring. Maybe one or two more cards and that's it. Total of three rigs with up to ~220mh/s in immediate future and total of ~260-270mh/s final.

Will mine whatever i will mine, then hold. Will not convert back to fiat, or at least not for a while. Maybe will sell some to self driving cars with AI later on.

Right now is still NOT a bad time to start mining ETH simply because the GPUs are in stock and still cheap. So going out and maxing out your credit card at Newegg doesn't seem like a big risk like it did 2 years ago. The reason why alot of people got BURNT with Litecoin GPU mining is because when the 280X came out it cost like $299 USD, and then it was out of stock and prices jumped to $450 USD and people kept buying them while the price of BTC and LTC kept falling and difficulty rising. With ETH you can get the R7 370 which is like $100 USD and worse case you sell it second hand for like $70 USD in 6-12 months. Yes, mining 'right now' is great which is why we're seeing an explosion of farms. If anyone cares to calculate how much some people have made of Ether's 3000% increase in the past 3 months and what this means, then it's kinda obvious how much capital the wiser early adopters have to sink into this. Further consider that Ethereums market cap ATM is just a shard under $1b from an origional $19m crowd fund.

People still have that money to spend, and obviously some are spending it on huge GPU farms. Because of this, mining profits in a months time will probably crash out with the diff explosion.

It really has nothing to do with POS. POS and POW will both be running in Serenity up until Metropolis which I believe intends only to run POS. OP is not trolling, just inexperienced and not fully aware of the more likely factors that threaten our POW returns some people like to buy and sell, some like to 'mine' as well. From the initial investors perspective, if you are selling out of eth, what will you buy? I bought eth directly when it was inexpensive (up to 0.008 BTC/eth), but now I want to mine instead of buying because mining insulates you against price volatility somewhat.

I have spent whatever i can spend and or have electricity/AC for during spring. Maybe one or two more cards and that's it. Total of three rigs with up to ~220mh/s in immediate future and total of ~260-270mh/s final. Will mine whatever i will mine, then hold. Will not convert back to fiat, or at least not for a while. Maybe will sell some to self driving cars with AI later on.

Yes, mining 'right now' is great which is why we're seeing an explosion of farms. If anyone cares to calculate how much some people have made of Ether's 3000% increase in the past 3 months and what this means, then it's kinda obvious how much capital the wiser early adopters have to sink into this. Further consider that Ethereums market cap ATM is just a shard under $1b from an origional $19m crowd fund. People still have that money to spend, and obviously some are spending it on huge GPU farms.

Because of this, mining profits in a months time will probably crash out with the diff explosion. It really has nothing to do with POS. POS and POW will both be running in Serenity up until Metropolis which I believe intends only to run POS. OP is not trolling, just inexperienced and not fully aware of the more likely factors that threaten our POW returns some people like to buy and sell, some like to 'mine' as well.

From the initial investors perspective, if you are selling out of eth, what will you buy? I bought eth directly when it was inexpensive (up to 0.008 BTC/eth), but now I want to mine instead of buying because mining insulates you against price volatility somewhat. I have spent whatever i can spend and or have electricity/AC for during spring. Maybe one or two more cards and that's it. Total of three rigs with up to ~220mh/s in immediate future and total of ~260-270mh/s final.

Will mine whatever i will mine, then hold. Will not convert back to fiat, or at least not for a while. Maybe will sell some to self driving cars with AI later on.

Yes, mining 'right now' is great which is why we're seeing an explosion of farms. If anyone cares to calculate how much some people have made of Ether's 3000% increase in the past 3 months and what this means, then it's kinda obvious how much capital the wiser early adopters have to sink into this.

Further consider that Ethereums market cap ATM is just a shard under $1b from an origional $19m crowd fund. People still have that money to spend, and obviously some are spending it on huge GPU farms. Because of this, mining profits in a months time will probably crash out with the diff explosion. It really has nothing to do with POS. POS and POW will both be running in Serenity up until Metropolis which I believe intends only to run POS.

OP is not trolling, just inexperienced and not fully aware of the more likely factors that threaten our POW returns some people like to buy and sell, some like to 'mine' as well. From the initial investors perspective, if you are selling out of eth, what will you buy? I bought eth directly when it was inexpensive (up to 0.008 BTC/eth), but now I want to mine instead of buying because mining insulates you against price volatility somewhat.

I have spent whatever i can spend and or have electricity/AC for during spring. Maybe one or two more cards and that's it. Total of three rigs with up to ~220mh/s in immediate future and total of ~260-270mh/s final. Will mine whatever i will mine, then hold. Will not convert back to fiat, or at least not for a while. Maybe will sell some to self driving cars with AI later on. Some people like to buy and sell, some like to 'mine' as well.

From the initial investors perspective, if you are selling out of eth, what will you buy? I bought eth directly when it was inexpensive (up to 0.008 BTC/eth), but now I want to mine instead of buying because mining insulates you against price volatility somewhat. I have spent whatever i can spend and or have electricity/AC for during spring. Maybe one or two more cards and that's it.

Total of three rigs with up to ~220mh/s in immediate future and total of ~260-270mh/s final. Will mine whatever i will mine, then hold. Will not convert back to fiat, or at least not for a while. Maybe will sell some to self driving cars with AI later on I had a few hundred mined eth which I had to sell off at 90c to pay electricity and a BTC loan. It wasn't pretty.

But I'll be damned if I sell any more now. I'm buying rigs with with mortgage redraw, effectively borrowing from my house with my eth holdings as security. Well, there's no doubt you're committed I, too, see great value in Ethereum, but the question is how long will it take for that to manifest, and how long will investors' patience hold out. As we agreed in an earlier exchange, Ethereum wall take a lot longer to be fully baked than anyone can imagine, at this point. One point on which I'm not quite with you is this ETH/BTC inversion scenario.

I personally don't see ETH and BTC as competitors, but rather complimentary. BTC is a store of value, the ultimate number of BTC that will be available is already now; it has no potential for inflation.

ETH will inflate, but it's core value is not as a currency, but as a smart transaction platform. ETH is, essentially, the stock of Ethereum. Ethereum is already working hard to develop a bridge between the BTC blockchain and the ETH blockchain to facilitate smart contracts with BTC as one of the base contract currencies. So, although I see great potential for further grow in ETH as a stock proxy, I don't really see it displacing BTC, and even if it were to do that, certainly not in the timeframe you've proposed. Obviously, though, no one knows how this very interesting game will play out. -Best Care David. The question regarding Bitcoin is, 'what gives it value?'

It has scarcity based speculative value. It has utilitarian value for the problems it solves by being a geo-politically agnostic currency and it can be traded for goods and services. However, it's value is not related to any physical fundamentals, not even the energy wasted to keep it going.

It was always an experiment, a prototype and so the truest value of Bitcoin is what has been learnt in order to give rise to something like Ethereum. And that is a qualitative value rather than quantitative. In the longer term, through IoT in particular, Ethereum will have physically tangible interaction with mainstream society, as common place and commonly used as are mobile apps now. That is a real social capital. What will Bitcoin have? I also don't understand why people say eth is not intended as a currency.

It is both a currency and a commodity, and if you don't own any then you can't interact with those real world Etherum conveniences. I've covered this territory on 'value' in a There is nothing in Bitcoin where I can't see Ethereum doing a better job except for perhaps Bitcoin's deflationary economic philosophy. That's why I'm BTC pessimistic, it's being superseded.

I'm not saying it will disappear but who will want it, who will want to mine it and who will want to maintain it? After a few more days thinking, I'll concede that saying there will be a inversion of the ETH/BTC pair in the short term was a bit preemptive. I was thinking that because BTC is the primary purchasing currency for ETH, that BTC holdings would be sold down to buy ETH. What I didn't consider is BTC's roll as the cross currency from fiat to Eth, IOW the demand for BTC remains as it's currently the simplest way to purchase ETH. That all changes once ETH/fiat exchanges are established, again driving down the demand for BTC. Some people like to buy and sell, some like to 'mine' as well.

From the initial investors perspective, if you are selling out of eth, what will you buy? I bought eth directly when it was inexpensive (up to 0.008 BTC/eth), but now I want to mine instead of buying because mining insulates you against price volatility somewhat. I have spent whatever i can spend and or have electricity/AC for during spring. Maybe one or two more cards and that's it.

Total of three rigs with up to ~220mh/s in immediate future and total of ~260-270mh/s final. Will mine whatever i will mine, then hold.

Will not convert back to fiat, or at least not for a while. Maybe will sell some to self driving cars with AI later on I had a few hundred mined eth which I had to sell off at 90c to pay electricity and a BTC loan. It wasn't pretty.

But I'll be damned if I sell any more now. I'm buying rigs with with mortgage redraw, effectively borrowing from my house with my eth holdings as security. When I hear stuff like this people selling their homes orcretirement to buy miners it tells me things are out of hand What if the price tanks back to 2 or 3 then what will you do?

It's the Wild Wild West of crypto nothing is promised I understand investing in mining it's really too late to buy large amounts of eth at current prices, like Someone said mining at least insulates you from price fluctuations since you can always sell your hardware But buying can work well too I made 3 btc playing the market this weekend sold a bunch at 15 Then bought back on the huge dump at 12 It's so easy to do this if I had 10k fiat available I could make 300 a day just following the whales. I'm buying rigs with with mortgage redraw, effectively borrowing from my house with my eth holdings as security. When I hear stuff like this people selling their homes orcretirement to buy miners it tells me things are out of hand Perhaps I made a bit too dramatic a statement. What I've done is redraw a few $1000 from advanced payments on my house, to pay for mining gear instead of funding it from my current ethereum holdings. The holdings though humble compared to many other early adopters, are still in excess of what I've redrawn.

My first rig was funded with a BTCJam loan because Ethereum was still so conceptual and I didn't want to mess with things on the home front. Now there's a whole lot more confidence in the platform.