How to Mine Ethereum in 2023 | The Ultimate Guide
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Ethereum was one of the hottest ways to earn an income in crypto up until mid-2022 and created record profits for computer hardware manufacturers such as Nvidia. Therefore, it’s only natural that you want to know how to mine Ethereum.
But is it still profitable or even possible?
Unfortunately, the answer is no to the latter, rendering all other questions moot. Why, though?
Well, buckle up for a quick look at what Ethereum mining is, why you can’t mine it anymore, and what you can do instead!
What is Crypto Mining?
One of the most revolutionary things about blockchains is that they run not on one server hidden away by some gigantic corporation but on thousands of computers out there.If you were to mine a cryptocurrency, then you’d be helping the blockchain function in a decentralized manner, protecting it against attack.
Mining isn’t just about creating new coins, however. That’s certainly part of it and might be the motivation spurring the vast majority of crypto miners, but it’s actually doing something very important for the blockchain.
The fact that a blockchain is so decentralized means that it needs a consensus mechanism or a way for all the nodes upholding it to agree on what the state of affairs is. The transactions that take place on the network are combined into blocks, which miners try to produce by leveraging their computing power toward the problem.
When enough of the blockchain’s miners agree that the solution to the puzzle is right, the network is said to have reached a consensus. The miners, in effect, agree that the transactions that took place are recorded correctly on the blockchain.
The thing is, proof of work mining isn’t the only way to reach a consensus. There are other consensus mechanisms out there, such as the increasingly popular proof of stake, proof of authority, and even newer models like proof of burn.
What is Ethereum?
Ethereum is a blockchain platform that is arguably as important as Bitcoin today, if not more so. Bitcoin is the undisputed king of cryptocurrencies, the OG, and the top dog of crypto coins.
Ethereum, on the other hand, lays the foundation for the existence of a surprisingly large number of major blockchain projects and cryptocurrencies, which are unicorns in their own right.
What Ethereum gave the world that Bitcoin couldn’t was the ability to add an element of programmability to the blockchain. So, rather than just sending transactions to and fro, Ethereum made it possible to build decentralized applications on the blockchain.
These dApps benefit from Ethereum’s security and immutability and open up a whole realm of possibility.
The main innovation that enables this is popularly known as the “smart contract.” They were first proposed by a cryptographer called Nick Szabo in the 90s, but Ethereum truly brought them to life. With a smart contract, you can trust code to execute actions when certain conditions are met.
This led to the DeFi boom of 2020, where dApps, through just a few lines of code, could entirely replace the services of financial institutions like banks and exchanges. Decentralized exchanges exist on many blockchains today, but they started on Ethereum.
DeFi is still feared by Wall Street given that it opens up the world of complex financial instruments to everyone—and does so with that vital ingredient of transparency right at the fore.
Given the revolutionary nature of Ethereum and the widespread interest in the Ether coin, Ethereum mining was one of the most lucrative ways to earn crypto. It was easy, too, given that, unlike Bitcoin, Ethereum mining was ASIC-resistant and was a product of GPU mining instead.
Why Can’t You Mine Ethereum Anymore?
Given the potential and the intention of blockchain-based projects to disrupt powerful industries such as finance, the underlying technology was always going to receive push-back.
Divisiveness appears to be a hallmark of the decade, and environmental issues are usually championed by the subset of society most likely to appreciate the transparency of blockchain and cryptocurrency.
As such, it made sense for proof of work mining and its energy impact to receive the brunt of the FUD.
You can find corporate media hit pieces on proof of work blockchains hitting the waves daily, and Bitcoin keeps getting compared to various countries in terms of power use. The drain on energy, quality of life, and society itself by the competing banking industry, on the other hand, is rarely spoken about so publicly.
Ethereum, in order to cut down on its energy costs and scale the network to better handle its popularity, decided to ditch proof of work in favor of proof of stake.
Following years of preparation, the “Ethereum Merge” went ahead in September 2022, cutting off the Ethereum mining scene at a stroke. Power consumption dropped by 99.95% as the Beacon Chain merged with the Mainnet, and the people who now produce blocks are those who stake ETH.
What Coins Can You Mine Instead?
So, you can’t mine Ethereum any longer because it switched to proof of stake. Plenty of miners were faced with this issue in 2022, and while many chose to sell their mining rigs, others switched to different coins.
Here’s a list of cryptocurrencies you could try to mine instead of Ethereum:
#1. Ravencoin
Ravencoin was one of the most popular mineable cryptocurrencies, even during the heyday of Ethereum mining. It’s a fork of Bitcoin with a few key changes, including a shorter block time and an ASIC-resistant mining algorithm.
#2. Bitcoin Gold
Bitcoin Gold is ASIC-resistant because its mining algorithm uses more memory than an ASIC can manage. It’s a lucrative cryptocurrency to mine, thanks to its price.
#3. Ergo
Ergo is a relatively new but also rather exciting cryptocurrency project. It’s a smart contract capable proof of work blockchain that’s part of the Cardano ecosystem, and its ERGO coin has a very attractive distribution thanks to the team having avoided pre-sales and VCs.
#4. Grin
Grin is a privacy coin that doesn’t reveal addresses or amounts on the blockchain and doesn’t store spent output data either. It needs beefy GPUs to mine it, so make sure your rig has more than 6 GB of VRAM.
#5. Ethereum Classic
Ethereum Classic is a decent alternative now that Ethereum mining is no more, but note that it forked away from Ethereum a long, long time ago. The two are similar in name only, but Ethereum Classic has retained a large following thanks to its code-based philosophy.
#6. Monero
Monero is an interesting coin to mine because it uses CPUs rather than GPUs. This can make it difficult to mine XMR at scale, but it’s often efficient to mine it alongside a GPU-mineable coin to utilize multiple PC components. Intrigued? Here’s our guide on how to mine Monero.
#7. Bitcoin
You can’t mine Bitcoin efficiently with a GPU mining rig because the market is dominated by ASICs, but it’s hard to go wrong with the OG.
Key Takeaways
Ethereum was one of the most popular coins to mine, especially for enthusiasts and gamers who could hook their GPU up with some software and make a small passive income every day.
For better or for worse, Ethereum’s community decided to undertake the switch to proof of stake consensus, leaving proof of work and mining behind. This switch, called “The Merge,” went through in 2022, and miners have been scrambling for alternatives since.
Ethereum is a truly dominant cryptocurrency, and its moves can have ripple effects. The global market for GPUs, for example, normalized almost immediately after having been in control of bots and scalpers.
With the demand from Ethereum miners gone overnight, prices on the secondhand market have stabilized. New GPUs remain overpriced, but that's entirely a different kettle of fish, and crypto mining has largely made its escape from the ire of gamers worldwide.
Ethereum Mining FAQ
Can you mine Ethereum?
Not anymore. You could do so until September 2022, but the Ethereum merge to proof of stake removed the necessity for mining on the blockchain.
How can you earn passive income from Ethereum?
Since Ethereum is now proof of stake, you can buy ETH and stake it to earn an income. Keep in mind that the staking minimum is a princely 32 ETH, so you may have to look into options like Lido ETH Staking.
Why did Ethereum switch to PoS?
The Ethereum community switched to proof of stake in order to reduce the blockchain’s energy impact and set it up for greater scalability. Ethereum is the most-used blockchain in existence, and PoS helps to support the vast number of users it has.