How to mine Ethereum in 5 min

I’m sure you’ve already heard of the cryptocurrency craze way before reading this post. Cryptocurrencies are slowly and quietly revolutionizing the way financial systems and transactions work (and should work in my opinion).

With Bitcoin hitting its $6K mark not awhile ago, a current total of $158B in market cap and hundreds of ICOs (Initial Coin Offering) conducted since August, there’s a current bubble in the cryptocurrency space. What’s more, is that it doesn’t seem this bubble is going anywhere, anytime soon.

So what would be the best way to enter this space and enjoy the growth? I’m not a cryptocurrency expert, however, from my research I’ve found that the answer is pretty clear:

If you’re looking for quick earnings, just invest in coins.

However, due to this ever-growing crypto market, mining in the short term could lead to significant earnings in the long term.

Personally, I’m very interested in Ethereum, and have found an effortless way to start mining it quickly on AWS! This post will walk you through the process.

What is Ethereum?

Ethereum is an open software platform based on the blockchain technology that enables developers to build and deploy decentralized applications. The advantage of Ethereum over Bitcoin, is that it can support many different types of decentralized applications.

Ethereum has gained massive growth in the last year with over 230% as you can see below:

However, increasing growth in the price leads to an increasing demand for Ethereum mining and therefore to an increase in mining difficulty:

So what is crypto mining?

Mining originates from the gold analogy of the cryptocurrency sphere. In simple, crypto mining is a process of solving complex math problems. “Miners” are people that spend time and energy solving these math problems. They provide the solution to the issuers, who verify it and reward the miners with a block of Ether. Intuitively, an increase in mining difficulty means it becomes harder to solve complex problems, and therefore to fewer rewards.

Is it worth it?

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 pretty expensive. However, as Ethereum price continues to rise, it could become worthwhile in the future.

Nonetheless, Ethereum will be switching to a proof-of-stake framework later this year, which means mining could no longer be relevant. Take in mind, that this could also lead to a significant increase in Ethereum price.

If you’ve reached this far and still eager to mine Ethereum, let’s get to it!

How to start your AWS Mining instance

The steps are pretty simple:

Go to your EC2 console in AWS and change the zone to US East (N.Virginia). This zone happens to be the cheapest for the type of instance we’ll be using, and also contains a community AMI that has all the required mining libraries already installed for instant use.
Under Instances, select Spot Instances and click ‘Request Spot Instances’.
Search for a community AMI called ami-cb384fdd and select it.
Under Instance type choose g2.8xlarge.
Review and Launch!

How to start mining

To start mining, you’ll need an Ethereum wallet and to join a mining pool.

To generate a wallet, simply go to https://www.myetherwallet.com and follow the steps. By the end of the process, you’ll receieve a wallet address.

We’ll be using Dwarfpool for mining, which is rated in the top best mining pools. Feel free to use others if you like.

Simply SSH to your instance and type:

> tmux

> ethminer -G -F http://eth-eu.dwarfpool.com/{WALLET ADDRESS}/{YOUR_EMAIL ADDRESS} --cl-local-work 256 --cl-global-work 16384

Tmux allows you to run a process when exiting your SSH connection.

Ethminer is an Ethereum GPU mining worker. Entering your email address allows you to receive notifications on payouts. The other parameters are for mining optimizations.

That’s it!

You should soon see a DAG file generated and right afterward, your mining should start. To view your stats, simply go to https://dwarfpool.com/eth and in ‘Worker stats’ enter your wallet address.

Personally, I’ve concluded that due to the very high Ethereum mining difficulty, it’s not really worth it in the short and mid-term. No one can know for sure what the future of cryptocurrencies holds and if this is just a bubble that will soon pop. Some even say cryptocurrency trading is equivalent to buying lottery tickets.

However, being a tech enthusiast and a believer in disruptions, I truly believe there’s a bright future for cryptocurrencies. If so, the current rise in Bitcoin and Ethereum is just the start. And one coin might be worth 100x its price today, which justifies mining it today.