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Learn more about Ethereum
What is Ethereum Mining?
Ethereum (ETH) was developed by the blockchain wunderkind Vitalik Buterin and released in 2015. The objective with Ethereum is to build an entirely new internet which operates in a decentralized fashion, removing censorship and control from centralized entities. With its turing-complete virtual machine, Ethereum is able to process any type of encoded request, from smart contracts, to financial transactions, to running applications, and much more. Ethereum also allows for anyone to create a cryptocurrency on its blockchain, with these new tokens being issued and transacted upon the Ethereum blockchain itself.
The network is fueled by gas in the form of its native Ether (ETH) token used to power smart contracts and decentralized applications (dApps) built on top of the Ethereum blockchain. The amount of gas is directly correlated with the computing power needed to complete any operation. Transactions with higher gas prices are prioritized, as miners have the option of ignoring transactions with a low gas price resulting in a low return on mining.
Mining Ethereum is very different than mining other proof-of-work (PoW) network such as Bitcoin and Bitcoin Cash because of the Ethereum SHA-3 hashing algorithm which uses Ethash. Additionally, the average block time on the Ethereum blockchain is quite fast, hovering around 15 seconds per block, creating a significant amount of blocks for miners to obtain a fee reward. New Ether is minted every month, and there is no upper limit to the total amount of Ether.
Which miners are used to mine Ethereum?
The Ethereum blockchain is resistant to the use of ASIC mining equipment because of the aforementioned Ethash and SHA-3 hashing algorithm used to obtain consensus on its network. Because of this resistance to ASIC mining equipment, GPU hardware is the best solution for mining Ethereum and maintaining profitability for miners. GPU miners tend to be cheaper than ASICs yet more powerful than CPUs, and in the case of Ethereum, provide the best returns for miners.
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