How to Mine Ethereum in NiceHash, With Mining Pools, and Optimal Settings

The cryptocurrency mining and Ethereum mining boom has mostly tapered off, though even after twelve months, the rollercoaster ride continues. If you've read our best mining GPUs and want to see what all the fuss is about, we've got the details on the most popular ways of mining with your PC. 

Besides the actual hardware for mining — which basically means having one of the best graphics cards — you'll need to decide on the software you want to run, and how you want to get paid. There are three primary approaches to mining, and we'll cover these in order of ease of getting started.

Before we continue, let's be clear: We're all about providing information, both good and bad. There are GPU shortages, other PC component shortages, GPU prices are in the stratosphere, and clearly there are a bunch of people who think mining is awesome. This has all happened before, and we've seen how it ends — or at least where it goes temporarily. 

Anyone that had the foresight to put together a big mining farm two or three years ago and then save all the Ethereum and/or Bitcoin it generated (while temporarily eating the costs) looks pretty smart today. At the same time, putting all the money straight into buying cryptocurrencies would have gotten similar results with a lot less hassle.

But what if you're trying to do the same thing right now? It will cost more, profits will be lower (or not even materialize for potentially years, if ever), and there are loads of other concerns that we'll get into.

Case in point: Just look at the past three years. We originally posted this article with data taken from before February 16, 2021. Since that time, we've seen record prices for Bitcoin and Ethereum come and go, multiple times. 

The difficulty of mining has steadily increased, and potential profits have trended downward over time. Currently, Bitcoin sits at around $38K and Ethereum is at $2,700. That's about a 30–35% drop in value since early December, 2021.

Longer-term stability tends to be at lower profit levels than what we saw in early 2021. Eventually, the difficulty of finding a block increases, or the price drops, either of which will drop the rate of return, and miners stop putting lots of money into scooping up GPUs. 

Ethereum difficulty(opens in new tab) initially peaked in May, then declined until late June (no doubt helped by China's crackdown on mining), but has been on a steady upward climb since then and is nearly at 13,000 TH/s. Ethereum also has plans to shift to proof-of-stake (no more mining) in the first half of 2022, however, so GPU miners may soon have to look elsewhere.

That brings us back to the matter at hand. Lots of people still want to know about mining, how it works, and how much they can earn doing it. We'll answer those questions as best we're able, and bring up other concerns and related information that you might not have considered. Hopefully, by the end of it all, you'll be better informed.

How to Mine with NiceHash

The easiest way to get started at mining is with NiceHash. NiceHash launched in 2014, right around the time of the first major spike in cryptocoin mining (second if you want to include Bitcoin's initial "surge" to $32 per BTC in 2011). Prior to NiceHash, getting started with coin mining was more complicated — as we'll detail below. 

NiceHash has greatly lowered the barrier to entry, and it gets rid of some of the worries about what coin(s) to mine. You effectively lease your PC's hashing power to other users, who get to choose what to mine, and you get paid in Bitcoin. NiceHash takes a small cut of the potential profits, and your PC can be up and mining in minutes.

• (Note: There are some alternatives to NiceHash, but generally speaking they function on similar principles. Some just mine the "most profitable" coin at any given time, and you keep those coins (or fractions of a coin). 

If a coin ends up becoming popular and shoots up in value, you could score big, but it can also go the other way and you end up with a bunch of worthless crypto.

We're not going to walk through every step of the process, as NiceHash already has multiple tutorials. 

The short summary is that you need to register with the service, and you should have your own Bitcoin wallet somewhere (e.g. at Coinbase(opens in new tab) or some other service). Then you download the NiceHash mining software, configure it to mine to your BTC address (provided by NiceHash), and you're all set. Your BTC will accumulate on NiceHash, and you can transfer it out whenever you like — which is a good idea since you never know if or when another successful hack might occur.

NiceHash has several options, ranging in degree of complexity. The easiest is to use the new QuickMiner, which is a web interface to a basic mining solution. You download the QuickMiner software, run that, and the webpage allows you to start and stop mining — you don't even need to put in your BTC address. 

It's dead simple, though the numbers can fluctuate quite a bit. For example, in a brief test QuickMiner suggested we "could be making 16% more" by using NiceHashMiner (which we'll get to next). Except, after letting both versions run for a bit, QuickMiner seemed to stabilize at the same performance level as NiceHashMiner. YMMV.

Next up is NiceHash Miner, which is what most people will want to use. It's more complex in some ways than QuickMiner, but it has more options that can improve overall profitability. By default, it will ask you to log in using your NiceHash account details. Alternatively, you can use the NiceHash app on your phone to scan a QR code, or just input your BTC address manually.

Once launched, the first time it runs, NiceHash Miner will benchmark your hardware using various common mining (hashing) algorithms. Which algorithms and software get tested varies a bit by your GPU, and you can customize things quite a bit. 

Right now, DaggerHashimoto (aka, Ethash, what Ethereum uses — a modified variant of DaggerHashimoto) tends to be the most profitable, though sometimes Octopus, Kawpow, or some other algorithm might climb to the top.

The idea is that NiceHash Miner will choose whatever is currently the most profitable coin to mine, based on what people are willing to pay to rent your hardware. Sometimes a new coin will launch, or someone will want to dedicate a lot of mining power at a specific coin, and they'll pay more to do so. 

Instead of mining Ethereum 24/7, you might occasionally run some other algorithm, and it's all managed by the software, which usually (but not always) manages to do a good job.

The initial benchmarks on NiceHash Miner can be a bit prone to error, unfortunately. That's because the tests are only run for a minute each, and as your GPU heats up it may also slow down. That means the first algorithm benchmarked often ends up with an inflated result. 

You can get a better estimate of performance by using the Precise mode (on the benchmark tab), which takes twice as long to benchmark. You can also manually enter hash rates, so for example if you notice that after 30 minutes or more that NBminer stabilizes at 94MH/s instead of 98MH/s, you can fine tune the mining speed. 

You can also schedule an algorithm for retesting if you think the result is off, and by default (it can be turned off) NiceHashMiner will periodically download new versions of the miners and automatically retest

The third and final NiceHash option is to use NiceHash OS. 

This is a custom Linux installation that would run in place of Windows, and it's recommended for larger scale mining farms that use NiceHash. As with all things Linux, getting it up and running may require a bit more knowledge and patience, but because it's an OS tuned specifically for mining, hash rates can be higher. (We didn't do any of our testing with NiceHash OS, due to time constraints.)

There are two big downsides to mining via NiceHash. One is that you're not actually getting Ethereum — not directly, at least. You'll get paid in Bitcoin, which you can then trade for Ethereum if you want. That's not necessarily a bad thing, considering BTC is the largest of cryptocoins, but if you want ETH you'll need to take some extra steps. 

The other downside is that NiceHash takes a cut of the amount paid, and the net result is generally lower payouts than mining Ethereum yourself. How big is the difference? Currently, direct Ethereum mining should pay about 7% more than NiceHash. That's a pretty big mining fee, though again the ease of use with NiceHash is hard to overstate.

How to Mine with a Mining Pool

Transitioning over to a mining pool instead of NiceHash opens up more opportunities, to both software and method of payment. Where NiceHash currently only pays out in BTC (again, not necessarily a bad thing), Ethereum mining pools will pay you in ETH. 

There are still fees to pay — most mining pools take 1–2% of the total income — but that's less than the 7% difference in pay that you might get from NiceHash. The first choice is what mining pool to use. Generally speaking, you'll get more stable income by going with the largest pool, but there are various reasons for not doing that. 

Most of those reasons are altruistic, like not wanting any one pool to control too much of the total network hash rate, so our advice is to go with a larger pool. (Google is your friend.) After choosing a pool, you'll need to set up your account, choose which mining software you want to run, and then configure your launch settings. 

That's simplifying several steps, all of which can vary quite a bit depending on which pool you use. Pool fees are a critical factor, ranging from 0% to 3% or more. Free pools tend to be less reliable, since it costs money to run the servers and infrastructure for a pool, so it's often better to pay a small fee rather than deal with the potential downtimes. 

Also pay attention to the payout scheme and payout requirements for the pool. Most pay out your Ethereum daily, provided you've hit minimum quotas, but some of those quotas are pretty high. For example, Ethermine.org has configurable payout limits starting at 0.1 ETH, which would take about a month to reach with a single GPU — a single RTX 3080 will mine about 0.006 ETH per day. 

It also pays out weekly if you hit at least 0.05 ETH and every 14 days if you've accumulated at least 0.01 ETH. The payout schemes meanwhile are designed to discourage pool hopping (i.e., changing pools if you get a 'hard' work unit or whatever), though we won't get into the intricacies of the various schemes here.

One big difference between NiceHash and your typical mining pool is that you need a separate Ethereum wallet to store your coins — you really don't want to just leave the coins with the pool indefinitely. While it's technically possible to have your coins transferred to somewhere like Coinbase, it's generally best not to have mining pool payouts go directly to a trading platform. 

We recommend setting up an online wallet, through a service like MyEtherWallet, and use that address for your pool payouts.

PSA: Don't use the same password on any sites related to cryptocurrency mining. Create a unique password on each one (consider using LastPass or a similar product), and if you're planning to hold onto the coins for the long haul, get them into your own wallet.

Once everything is in place, you can finally launch your miner. A lot of the miners have sample configurations for popular pools that you can edit, and the pool itself will have configuration details on how to connect. So as an example, launching T-rex mining with Ethermine looks like this:

• t-rex.exe -a ethash -o stratum+tcp://us2.ethermine.org:4444 -u 0x0b8324FcE71D4E6501b5E82aB9466f230A990cB5 -p x -w worker1

That tells the miner what algorithm to use (ethash), the pool server to connect to (Ethermine), the wallet address (put your own address in!), password (none), and worker name. Most modern miners accept a similar syntax, so tweaking the mining command isn't too complicated. 

Here's the catch: NiceHashMiner has a bunch of extra features to allow remote monitoring, notifications if a miner goes offline, ability to run a script if something appears wrong, etc. Doing all of that with pool mining requires more time and effort, which is why a lot of people are willing to take a bit less in the way of coins.

How to Solo Mine

Don't. No, seriously, it's not worth the hassle and you almost certainly won't actually get any coins — at least not with Ethereum or Bitcoin.

Statistically, your chances of solving a block are equal to your percentage of the total hash rate of the network. With Ethereum, the current network hash rate is now over 1 PH/s, or 1 billion MH/s. Even if you had a farm of 100 RTX 3080 GPUs each doing 95MH/s, that's only 0.0009% of the total. 

Mathematically, Ethereum averages around 6500 blocks per day, so your odds would be about 6% per day of finding a block, with an 86% chance of hitting a block in about a month. With a single RTX 3080, your odds of hitting a single block in a year are only 20%, and 49% after three years. The proof of stake transition makes any such talk completely irrelevant. In practice, the mining pools have a much higher chance of solving and getting credited with a block.

How much is a single block worth? There's a static block reward of 2 ETH right now, plus transaction fees that currently average around 2 ETH, plus some 'uncle' rewards that are relatively small by comparison. Basically, 3.5 ETH, plus or minus a few percent. 

At a price of roughly $2,800 per ETH (at the time of writing), that's quite a bit of value, but it only works if you actually solve a block. For all but the most dedicated of mining operations, the steady payouts that come from joining a mining pool are a far safer approach.

But let's say you still want to try solo mining. What do you need to do? First, you have to set up an Ethereum wallet and download the Ethereum blockchain. Even after pruning a bunch of extra data that you don't need, it's still typically around 525GB in size, and downloading can take quite a while. 

Once your wallet is synced up, you can point your own mining rigs at your local node, which is mostly the same as configuring miners for a mining pool except now you're using your own pool. Congratulations! You're now flying solo.

Even with a lot of high-end GPUs, you likely won't mine any Ethereum before proof of work mining ends. The theoretical benefit to solo mining is that you get the whole block reward plus fees, with no percentage going to the pool. The downside is that without a massive farm, you'll very likely end up getting nothing.

There are however mining pools that operate on a 'solo' mining approach. Basically, the whole pool works together to find a block solution, which means it's more likely to get incorporated as the 'winning' block, but only the participant (mining address) with the highest contributions to date (since the last credited block) gets the reward. 

This is much easier to use than pure solo mining, but without a decent amount of hashing power it will take quite some time to reach the point where you get the rewards from mining a block. Also, you still end up paying a small pool fee, usually 1%, at which point you should probably just go back to a mining pool with steady payouts.

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