How to Mine Etherum in 2021: Beginner’s Guide

Etherium mining is an excellent way for people with high-end graphics cards to earn some cash while sleeping – at least until the eth2 rolls out completely. Even after the recent crypto dip, Etherium’s value has been up considerably. Not to mention the congestion on the Ethereum network has been driving up gas fees. All this means Etherium mining is still a profitable business in 2021.

In this comprehensive guide for beginners, we will dive deep into the features of Ethereum mining, what makes it different from Bitcoin mining, and how you can get started. We will also discuss everything you need to consider before investing your hard-earned cash in Ethereum mining, such as software, hardware, and online mining forums/community. So, grab a cup of coffee and read on!

What is Etherum Mining

Etherum mining – like some other popular cryptocurrencies – utilizes the Proof of Work (PoW) consensus mechanism to facilitate its block generation. This method has its advantages and disadvantages. However, according to the developers, it has more cons than pros. The biggest being non-scalability.

Etherum is a Turning Complete blockchain; it needs to be super fast to allow other decentralized applications to run on its network. So, Etherum core developers are upgrading the entire network to Ethereum 2.0 to overcome this challenge. Ethereum 2.0 will implement the Proof of Stake (PoS), I.e., staking instead of the mining consensus mechanism to secure the network.

Ethereum’s PoW: Essential Aspects

There are two aspects of PoW that you need to understand.

  1. Hashrate: The number of calculations miners in the network can perform in one second. This means if there are more computers in a network, higher will be the hash rate.
  2. Network difficulty (or ND): It measures the difficulty of solving a complex mathematical problem and is measured in hashes per solution.

These two concepts are directly related to one another. An increase (or decrease) in hash rate entails an increase (or decrease) in Network difficulty. With ND, the Ethereum network regulates block generation time. As Ethereum’s blocks are generated every 14 seconds (more or less), whenever this number decreases or increases, the ND adjusts accordingly.

Understanding the difference between Ethereum mining and Bitcoin mining

Despite some similarities, below are the five most significant differences:

1. Both use a different encryption algorithm
While Bitcoin and Ethereum both use the PoW consensus mechanism, they utilize different hashing algorithm. Bitcoin uses the SHA-256, while Ethereum utilizes the Ethash encryption algo.

2. Both have a different supply cap
Bitcoin’s supply is capped at 21 million. On the other hand, Ethereum has virtually no supply cap. However, it limits the number of Ethers you can mine in one year, which is 18 million.

3. Both offer different block rewards
Back in 2015, when Ethereum was first launched, the reward for one block generation was 5 Eth. It was reduced to 3 (in 2017) and then 2 Eth (in 2019). On the other hand, Bitcoin initially had a 50 BTC reward. It’s cut in half every 4 years. Currently, the block reward for Bitcoin is 6.25 BTC.

4. Both have a different block generation time
Ethereum miners can generate a new Ether block in nearly 14 seconds. In contrast, Bitcoin miners can do so in 10 minutes. This means almost 6,600 Ethereum blocks are generated each day while only 144 Bitcoin blocks can be generated on the bitcoin network.

5. Both use different mining equipment
Bitcoins are mined using specialized mining machines called ASICs. These machines are much more powerful (and expensive) than regular GPUs. Besides cost, another disadvantage is that you cannot repurpose them to stop mining Bitcoin. Ethereum, on the other hand, is mined using GPUs. You can repurpose GPUs if mining becomes non-profitable in the future.

How to mine Ethereum?

Below are the three most common ways to mine Ethereum.

1. Solo

Solo mining – as the name suggests – is mining alone. There is no pool to join. There are no partnerships. The basic idea of solo mining is that miners can contribute their resources to solve mathematical problems and verify transactions. Experts discourage solo mining because the hash rate required to mine a single Ethereum block is gone beyond the hobbyist’s level. If anyone wants to do it now, they have to set up industrial grade operation, which is very difficult.

2. Pool

Pool mining is by joining a pool of other miners and contributing your resources with a common pool. When miners come together to make a pool, it increases their hashing rate and therefore increases their chances of creating a block.

But, not all pools are profitable. Keep these factors in mind before joining a pool for mining.

  1. Geography – Join a pool that is as close to you as possible
  2. Size – Large pools have more chances of creating blocks
  3. Minimum distribution – Go for a pool with the lowest minimum distribution
  4. Fee – Ideally, lower the fee, better it is, but not always. Consider the above factors as well.

3. Cloud

Cloud mining works just like pool mining, but you contribute funds instead of contributing resources(i.e., hashing power). With your funds, the cloud mining service provider purchases mining equipment and starts mining on your behalf. Rewards are then split among investors, and the cloud mining company keeps a percentage for the service.

If you are looking into cloud mining Ethereum, consider the following pros and cons:


  1. No purchase, installation, or maintenance of complex mining equipment
  2. No headaches over disposing off the worn-out and damaged equipment
  3. No equipment noise
  4. Cheap to start, easy to run, effortless to continue


  1. No control over the mining equipment
  2. It can be risky for some investors as scams are rampant

6 Steps to set up your very own Ethereum Mining Machine

Step 1: Choose the Right Hardware
Choosing the right hardware is crucial for mining. If your hardware isn’t compatible with each other or a component is a mismatch, it will create a bottleneck and lead you to lose money. Price, performance, and availability are the three most important factors in choosing the right equipment.

As far as the GPUs are concerned, there are two main options: AMD and Nvidia. Both are good options. However, AMD GPUs are cheaper and versatile. AMD GPU will be most suitable for you if you are cash-strapped and want to mine multiple cryptocurrencies. Nvidia cards, on the other hand, beat AMD in sheer performance.

If you are unsure, take a look at our top picks for the best GPU Etherum mining.

But a better performance also means more energy consumption. It can eat into your profits. Therefore, to be a profitable miner, you should consider all these factors and strike a balance. You can use an online profitability calculator, such as this one, to calculate which GPU will best suit your unique situation.

Furthermore, consider the amount the VRAM that comes with your graphics card. Because Ethash also uses a DAG file to mine ether coins, it has to be stored in each card. The size of the DAG file is currently over 4Gbs. This means you need a GPU with at least 6 GB VRAM to mine ether easily.

Step 2: Install the Hardware
Next, you need to install the hardware. To do this, you need the companion software, aka the drivers. As the major hardware component is your GPU, you need to get a companion driver for your GPU. Remember, each manufacturer creates its own drivers for a target operating system.

You can visit the Nvidia support page here if you are using an Nvidia card or get the AMD drivers for your respective GPU from this link if you have an AMD GPU. Ensure you are downloading the correct driver based on your OS.

Step 3. Get a suitable Mining client

A mining client is a software that allows your computer to communicate effectively with the Ethereum Blockchain. It’s different from a driver because a driver helps two computer components communicate with each other. Some of the popular mining clients to consider for Ethereum are:

  • Ethminer
  • CGMiner
  • Phoenix
  • WinEth
  • BFGMiner
  • Claymore

Note: Never download a mining client from a third-party website. Always download the miner from its official repository.

Step 4: Choose a Wallet
As you will be holding your Ether for a while, you need a safe and secure wallet. Now, there are 2 things to consider when choosing a wallet for Ethereum. First, whether it should be a Hot wallet or a Cold Wallet, and second whether it should be a Full or Light node.

Hot or Cold wallet

If your crypto wallet is connected to the internet, it’s a hot wallet. These include mobile, web, and desktop computer wallets. Hot wallets are less secure and can be accessed remotely. Cold wallets, on the other hand, are disconnected from the internet. They cannot be accessed remotely. Examples of cold wallets are Trezor, Ledger Nano, SteelWallet, ColdTi, etc.

Full or Light node

A Full node ethereum wallet can download the entire Ethereum ledger on a device it’s installed on. For instance, the official Ethereum wallet Mist is a great example of a full node wallet. Conversely, light node wallets don’t store a copy of the entire ledger. Instead, they only point to other full nodes. Therefore, they are easy to download as well as easy to operate. Trezor and Ledger Nano are Light node wallets.

Step 5: Optimize your OS settings.
Mining Ethereum is possible on both Windows and Linux. However, windows remain a popular option among beginners because of its user-friendly interface and ease of operation. Linux is suitable for advanced users who want greater control of their mining machines.

That said, whatever OS you choose, its default settings may not be suitable for mining. Therefore, you need to optimize your OS settings. This optimization may involve:

  • Changing Virtual Memory settings from Control Panel to improve system performance
  • Changing Power settings to prevent activating the “sleep mode” and optimizing the system’s power consumption.
  • Make some register tweaks to disable any unnecessary BG services like Windows updates, scans, etc.

Step 6: Join a Mining Pool
Finally, you need to join a mining pool to start mining. While it’s possible to do solo mining, we recommend joining a pool to get the most out of your investment. You can join any of the following mining pools for Ethereum:

Ethermine – With a hash rate of 84.59 TH per second
Dwarfpool – With a hash rate of 125.27 TH per second
Nanopool – With a hash rate of 20.62 TH per second

Remember, each pool has a specific setup guide. You will also need to connect to their respective stratus servers. All this information will be available on their official websites.

General Tips for Ethereum Mining

  1. Your mining space should be well ventilated, soundproof, and have decent heat resistance.
  2. Always get new equipment with a warranty because rigs break down often.
  3. Use a high speed wired Ethernet connection, instead of a Wifi
  4. Mining rigs often get stuck, so make sure you can access it any time you want
  5. Rigs require routine maintenance, don’t slouch!


So, that’s all. If you are a beginner, you have learned what Etherum mining is, how you can do it by following various methods, and what factors you should consider before setting up your first mining rig. We have also provided all the information you need about the mining equipment, installation, and configuration. Hopefully, you are now all set to start mining. Good luck!


Is Etherum mining still profitable?

The complete rollout of eth2 will last at least until 2022. So as long as you are considering all the factors we discussed above, yes, Etherum mining is still profitable.

How much will mining Ethereum increase my electricity bill?

Roughly speaking, Eth miners are assumed to pay 10 cents per kWh on average. So you can calculate your electricity bill increase based on your power consumption.

How much internet speed is required for etherum mining?
Ideally, you need a 2 Mbps or faster internet connection to mine Ethereum.

Can I mine Eth on my phone?
No, you cannot, as mobile phones don’t support graphics cards.

About the author

Syed Asad

Asad is passionate about all things tech. He brings you reviews of the latest gadgets, devices, and computers