🔲Ethereum Mining and mining pools thread.
What is mining and what are mining pools?
Let's see it in 1 minute.
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What is mining and what are mining pools?
Let's see it in 1 minute.
↓
Table of Contents
- What is mining?
- Why miners?
- Who can become a miner?
- Cost of mining.
- Mining polls.
↓
- What is mining?
- Why miners?
- Who can become a miner?
- Cost of mining.
- Mining polls.
↓
What is mining?
Ethereum uses the proof-of-work consensus mechanism.
Mining: the process of creating a block of transactions that are added to the current Ethereum blockchain.
Ethereum miners use their time and power to:
- process transactions
- produce blocks.
Ethereum uses the proof-of-work consensus mechanism.
Mining: the process of creating a block of transactions that are added to the current Ethereum blockchain.
Ethereum miners use their time and power to:
- process transactions
- produce blocks.
Why miners?
In a decentralized system, everyone needs to agree on the order of transactions.
The production of blocks is done by miners who solve computationally difficult problems.
This is needed for security reasons and to protect from attacks
In a decentralized system, everyone needs to agree on the order of transactions.
The production of blocks is done by miners who solve computationally difficult problems.
This is needed for security reasons and to protect from attacks
Who can become a miner?
Technically anyone.
But miners must purchase dedicated hardware to mine profitably, so not everyone can mine ETH with a profit.
To do this, they need:
- dedicated expensive hardware.
- consume energy.
Technically anyone.
But miners must purchase dedicated hardware to mine profitably, so not everyone can mine ETH with a profit.
To do this, they need:
- dedicated expensive hardware.
- consume energy.
Cost of mining
- HW to build and maintain a mining rig.
- Electrical cost of powering the mining rig.
- Additional support equipment (cooling system, ...).
In addition to that, there is also a cost in case you are in a mining pool group.
- HW to build and maintain a mining rig.
- Electrical cost of powering the mining rig.
- Additional support equipment (cooling system, ...).
In addition to that, there is also a cost in case you are in a mining pool group.
Mining Pools
A mining pool is a group of miners who combine their computational resources to increase the chances of:
- finding a block
- successfully mining.
There is usually a flat fee to pay for the generation of each block.
A mining pool is a group of miners who combine their computational resources to increase the chances of:
- finding a block
- successfully mining.
There is usually a flat fee to pay for the generation of each block.
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