The Big Opportunity: Smart Contracts Banking

Smart Contracts are the transaction tools of the future. Through creating safe, trackable contracts of law that are automatically enforced, smart contracts will change the way many industries interact with their clients and manage their agreements and by using Ethereum blockchain technology, smart contracts are self executing contracts when all the criteria are met.

Smart contracts benefits include better security for the safety and confidentiality of the contract, transaction costs are reduced and the redundancy is increased as multiple copies are held across the Internet.

Smart contracts are most effective in area’s where the terms of the contract are absolute and measurable, for example in the shipping and freight industry and in the financial industry, where the terms are not subjective but can be calculated and tracked.

As a result of this, one of the greatest opportunities for smart contact applications is in the banking industry, where commercial contracts are an inherent part of the nature of the business and the terms of the contract are not subjective. In addition, because Ethereum is decentralized and open source, any developer can use it to create and write smart contracts.

Smart Contracts: Banking uses cases

In October 2016, Capgemini Consulting released a paper named “Smart Contracts in Financial Services: Getting from Hype to Reality ” which highlighted how Ethereum contracts reduce risk, inefficiency, error and fraud for the banking industry in comparison to the traditional paper based contracts. The report foresees most first world banks moving to smart contracts in totality as early as 2020.

Some of the area’s within the banking industry that have been identified as ideal for smart contracts include:

Mortgages:

these require huge amounts of data to be collected, documented and monitored, including property values and large amounts of personal data of all the parties involved. Through access to online information such as title deeds and Land registries, the process can be automated and the turn around time greatly reduced. In addition the monitoring of the activity in terms of the contract can be done automatically reducing the delay of manual interactions and eliminating the chance of error. Capgemini estimated savings of up to $960 per mortgage.

Smart Bonds:

due to the ability of Ethereum smart contracts to calculate and manage huge amounts of data and execute complex calculations, the development of smart bonds,where the legal requirements of the bond are coded into the contract, is a given.

Knowing your customer: before any interaction with a bank a large amount of information about the customer needs to be collected. With the introduction of smart contracts and blockchain the information of all current clients will be easy to access and update new applications, reducing the frustration of the customer and the costs and time delay for the financial institution.

Clearing and Settlements:

This is another huge processing area for a bank where smart contracts can make a big difference. Currently a consortium of banks is testing the possibility of smart contracts in this arena to understand the possible impact. By using smart contracts the calculations of the trade settlements can be done automatically and show significant savings.

Not all the possibilities mentioned here are immediately available for the banks. In most cases, careful thought and planning still needs to be applied before the move to smart contracts in total, but the opportunity for the banks to improve their service, accuracy and bottom line makes involvement in this area inevitable.

http://blockchainapac.fintecnet.com/uploads/2/4/3/8/24384857/smart_contracts.pdf

https://btcmanager.com/a-cost-benefit-analysis-of-using-smart-contracts-in-banking/

https://www.bizjournals.com/bizjournals/how-to/technology/2017/09/business-advantages-of-blockchain-smart-contracts.html

Smart Contract Applications

Smart contracts are digital contracts that can be used in place of all the standard legal contacts such as leases, shares, property sales or anything else required by contracting parties.

A smart contract is a self executing contract that behaves exactly according to the manner in which it has been written. They are less expensive that traditional contracts as there is no need to hire a middleman to write the contract and they cannot be lost or ignored as they have been duplicated across the network.

Ethereum contracts are secure and un-hackable. Ethereum was designed specifically for smart contracts and is the most popular platform due to its flexibility. For more information on what smart contracts are and how smart contract blockchains are explained, visit https://www.coindesk.com/information/ethereum-smart-contracts-work/.

Smart Contract Applications

The application of smart contracts in the ever growing digital world is limitless. Here are a couple of smart contract examples to demonstrate why they are growing in popularity in all industries:

Smart Contracts:  Insurance

A challenge with traditional insurance policies is the amount of time needed to process the claim and the intense administration requirements. By converting the insurance policy into a smart contract, once an incident occurs that should begin the claim process, such as a car accident, the contract can be triggered. The pre-agreed limitations and circumstances surrounding the claim would have been written into the contract and the claim can be processed or denied based on the information. Administrative costs are reduced, subjectivity taken out of the decision making process and settlement happens faster.

Smart Contracts:  Entertainment

One of the contracts that could be simplified by writing them in Ethereum instead of managing on paper, would be the payment of royalties to artists. With the multitude of songs available, tracking and managing who is the valid artist due a royalty payment is complex and  susceptible to error. Should all these contracts be recorded digitally and available for view to multiple parties, tracking the rightful owner and initialising the royalty payment would faster and more efficient and as changes cannot be made to the contact without the permission of all the parties involved, the artists are assured of receiving their due.

Smart Contracts:  Banking

The banking world is surrounded in paperwork and contracts and the administration and management of these contracts, combined with the huge amount of documents that accompany these contracts, cost the banks millions in salaries and storage space. Many of the contracts could be moved into the smart contract space and large mounts of money saved.  An example of this could be the mortgage contracts over properties. The smart contract would specifically state the terms of repayment, the actions when a client defaults and once the mortgage has been settled, the transfer of the property from the banks name to the new owners. Other applications that are being investigated in the banking environment are those of bonds, interbank clearings and settlements, coupon payments, and overdrafts and loans.

If you’re looking for applicable areas for smart contracts banking is certainly an attractive option.

Government

Smart contracts are also being considered in area’s of government as well to see how they can be used to streamline voting, identify management and simple contracts between state and citizen such as rates and taxes. The list above is just a small indication of the possibilities and we have not even looked at the opportunities in Technology and Energy.

Further Reading:

For some more ethereum contact examples and more smart contract use cases, please visit the following sites:

Ethereum Contracts Explained

This article explores the idea of smart contracts, looking specifically at Ethereum contracts and some of the many potential use cases.

Ethereum contracts: what are they?

A smart contract is quite simply a legal contract that is created in a digital environment using blockchain technology. Smart contracts can be used in place of all the standard legal contacts such as leases, shares, property sales or anything else required by contracting parties.

The relationships and the requirements of the contract are enforced using crypto-code and the contracts self-execute in the exact manner that they have been set up to do by their creators.

The advantage of using a self executing contract versus the traditional legal contract is the elimination of a middleman and the associated costs and delays. The decentralised nature of the Blockchain technology used for the creation of smart contracts also ensures higher security of the contract, which accounts for its rising popularity among banks and governments.

Smart contracts are generally associated with the cryptocurrencies and although they started in the Bitcoin environment, Ethereum has fast become the platform of choice because of it’s unlimited processing capacity. The duplication of the smart contracts across the network also ensures that the contract cannot be lost or misplaced.

Ethereum smart contacts explained

In the traditional world, when you need a contract drawn up you would contact an attorney and discuss the terms and requirements with them and after a period of time, arrange with the other party to sign.

The executions of the clauses are also dependent on the attention of the parties or attorneys to enforce. In the case of a digital contract, the process has been likened often to that of a vending machine, you put your cryptocurrency in, determine the terms and out comes your contract.

The contract is created and becomes a part of the public ledger, while the parties remain anonymous. Once the triggering event takes place, which could be a date or a action by one of the parties, the contract becomes self-executing and the terms are enforced and the funds transferred.

Smart Contract Use Cases

Looking at the cast array of smart contract applications gives you an idea of the kind of impact this technology could have.

Smart contracts can be set up across multiple parties and the execution of the contract can be triggered when a certain percentage of the participants, or the majority, have approved the transaction.

Due to the flexibility and security, the application of smart contracts is limitless with it being considered for use in many industries including:

  • Banking
  • Health
  • Insurance
  • Government

When it comes to ethereum smart contracts, banking looks set to be one of the most heavily impacted industries, with the potential to completely transform the way money is moved around the world.

In 2015, Blockchain smart contracts were used by the depository Trust and Clearing company to process more than 345 million transactions worth more than $1.5 quadrillion. Suggestions have even been made for using Smart contracts to replace the current voting system, as it will be faster, safer and more efficient, possibly increasing voter numbers.

The US Postal services has also been looking at using smart contracts for money transfers.

Smart contracts are gaining popularity across many industries and are replacing the use of traditional contracts in many instances.

Ethereum Contract Example

Below is one of many simple smart contract examples:

A smart contract could be used for the delivery of a news article by a freelancer. The parties will agree on the cost of the article and the date on which it should be submitted.

Once the editor has received the piece and is happy, the payment is triggered and the funds transferred via cryptocurrency to the freelancer. If the writer does not deliver, then the newspaper is refunded.

Top Ethereum Mining Pools (2017)

Joining an Ethereum mining pool and combining your resources with other miners will help you see results faster and realize a quicker return on your investment.

This post will take a look at some of the top Ethereum Mining pools in 2017.


With so many mining pools at play in the market, solo miners are finding it more difficult to get blocks to process and the Ethereum mining rig that a solo-miner uses, needs to have massive processing power to be able to compete with the pools, which can be very expensive.

If you decide to join a pool, then choosing the right pool that meets your mining expectations is important, as well as understanding the different pay-out methods and how they will impact your earnings.

The larger pools, that have been mining for longer, are more reliable and you can be more certain of receiving your profits.

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To calculate your expected earnings and see the best path to choose, you can use the calculator at this link.

Check out our other post on Ethereum mining calculators

The Best Ethereum Mining Pools of 2017

The top two Ethereum mining pools are Ethpool (http://ethpool.org) and Ethermine (https://ethermine.org). Together they have more than 27% of the network hashrate.

The two share an underlying pool, but have different payment methods. Ethermine uses the PPLNS payment method, (Pay Per Last “N” Shares) which involves some luck in the payment but on average pays 5% more. Ethpool is a predicable solo mining pool and pays on the PPS method, a standard pay per share model. Ethermine has more than 200 000 active workers and processes about 32 blocks an hour, while Ethpool has about 12500 active workers and processes about 5 blocks an hour.

See our full post on Ethpool vs Ethermine and the ethpool payout scheme

Other top pools include:

  • F2pool – Also known as Discus Fish (https://www.f2pool.com/).  F2pool has been operational since 2013 and contribute about 24% of the network hashrate.  Payments are also made via the PPS method and on a daily basis. The site is predominantly Chinese but has an English interface and has servers across Asia to ensure security and redundancy. F2pool can also be used as a litecoin mining pool.
  • Nanopool – Next on our list is Nanopool (https://nanopool.org). Nanopool currently has 40 000 Ethereum miners and accounts for 15% of the hashrate. Nanopool uses the PPLNS method to calculate payments the same as Ethermine. Payments are made several times during the day and Nanopool has servers in Asia, Europe and America. Nanopool also offers miners the option to mine in Ethereum Classic which is a split from the traditional Ethereum currency.
  • MiningpoolhubMiningpoolhub (https://miningpoolhub.com) currently generates about 7.6% of the hashrate activity on the network. The reward calculation is based on a transaction fee, a block finding fee and uncle rewards and incentives. Miningpoolhub also has servers across more than one continent (US, Europe and Asia) ensuring a redundant environment.
  • Dwarfpool – The last of our top performing Ethereum pools is Dwarfpool (https://dwarfpool.com). Dwarfpool uses a RBPPS payment method (round based pay per share), which is based on the PPS method. Autopayouts are done hourly and they guarantee 100% uptime due to their distributed infrastructure. Dwarfpool makes up about 13% of the network hashrate.

All these top pools offer statistical reporting and monitoring via e-mail.

There are a number of pools that support multiple currencies, we’ve covered some of these in our posts on dogecoin mining pools, and LTC mining pools.

Cloud Mining

Mining pools are not to be confused with Ethereum cloud mining where the full task of mining is outsourced to an organisation which supplies the hardware and running costs and pays you a dividend based on your investment.

Mining pool payout schemes

The various different mining pools have different payout schemes, including PPS+ vs PPLNS. These determine the method by which your contribution to the pool is calculated, and ultimately how much money you get. It is important that you understand the payment scheme before you get involved in a pool.

Trezor vs Ledger Nano S

Hardware wallets are physical devices for storing cryptocurrencies and tokens in a safer and more secure environment than the traditional software wallets.  Where software wallets are often developed in open-source and generally more susceptible to hacking and theft, a hardware wallet is isolated from the Internet and has to be attached to your computer for the codes to be accessed, rendering your tokens more secure.

To date there have been no reported thefts of tokens or coins from a hardware wallet, however even hardware wallets do have their vulnerabilities.

The cost of a hardware wallet is higher than that of a software wallet and with the small returns many miners are seeing, the cost of the hardware wallet might not be easy to justify.

If you’ve invested in an ethereum rig, or cloud mining service, you definitely need a safe place to store your ether and an Ethereum hardware wallet is definitely a good bet.

Trezor vs Ledger Nano S

Trezor

Trezor was first to market with a hardware wallet for cryptocurrencies in August 2014. Each Trezor wallet has a unique passcode that prevents anyone from accessing your transactions should your wallet be stolen and in cases where you Trezor is lost or stolen; you can recover your tokens by accessing the wallet with this passcode. Trezor works with a long list of client wallets such as ArcBit, Chrome Extension, Electrum, Sentinel and Etherwall. Trezor is fully supported on Windows 7 and higher, OSX and Linux platforms as well as being compatible with most Android devices which have a USB on-the –go.

Trezor safely stores tokens for Bitcoin, Litecoin, Dash, Zcash, Ethereum, Namecoin and Dogecoin.

Trezor is a small device, about the size of a key, with a screen, which connects to your computer via a USB cable.

Trezor is slightly more expensive than some of the other hardware wallets available.

Ledger Nano S

The Ledger Nano is a slightly less expensive hardware wallet option comparative to the Trezor but offers a similar level of advanced security versus a software wallet, however it does not offer passpharse support.

A passphrase is an additional text the user creates when setting up the account, which is required when the wallet needs to be recovered, thereby adding another layer of verification.  The Nano S requires the user to set up a PIN code that keeps device secure and after three failed attempts to enter the correct PIN code, the device will not be accessible.

The Ledger Nano S is very easy to setup can be done without needing to connect the device to a computer. The Open Bitcoin Privacy project voted Ledger wallets as the most private wallets available in their report in 2016.

The Ledger Nano S works with Bitcoin, Ethereum as well as Altcoins and is compatible with a variety of Cryptocurrency wallets.

You can find the ledger nano s for sale on sites such as Amazon.com or direct from the manufacturer.

Final Thoughts

Both the Trezor and Ledger Nano S have built in screens, which is advisable largely due to the increased security offered. Hardware wallets with a screen will display the generated password on the screen of the device, while wallets that do not have a screen will send the passcode to your phone.

As your phone is accessible via the Internet it does put the security of the passcode at risk. The screen also adds an additional level of verification when you are making payments.

If you’re interested in a hardware wallet you should also consider the ledger nano s vs keepkey.

For more info check out this useful video:

 

 

Ethpool vs Ethermine

The costs of mining Ether can be very high, with electricity costs and the cost of setting up a mining rig that can process at the speed required.

As the rewards of mining can be slow and intermittent, many miners choose to combine their hardware resources and create an ethereum mining pool, increasing the speed at which blocks are processed and the profits paid out.

This post will focus on the two main pools, Ethpool vs Ethermine. For information on other pools, see our post on the top ethereum mining pools.

Miners then share the rewards of the payout on proof of work. Ethereum is the fastest growing cryptocurrency, more than 2000% since its launch, in the market and Ethereum miner’s work for tokens called “Ether”.

Payments to the miners can work on different principles and calculations, depending on the type of pool they have joined.


Ethpool vs Ethermine

Two of the biggest Ethereum mining pools are Ethpool and Ethermine, which run on the same platform and have combined process of more than 25% of the total network hashpower. However the manner in which the pools run, and the risks and rewards are quite different. Both pools run on a global network with servers based the United States, Europe and Singapore, which are fully redundant and run 24/7.

Ethpool

Ethpool is a predictable solo mining pool and 100% of the proceeds are paid to the miner that contributed the most work. By using Ethpool you get the advantages of pooled mining with a solo mining payment scheme.

Ethpool offer miners the ability to mine anonymously and supports all types of Ethereum miners. Full support is offered to miners, including those using Stratum protocol. There is a big reduction in variance so miners earn their payment as soon as their work is equal to the difficulty of the block. The site includes online mining statistics and can help you estimate your earnings, when used with a calculator. The pool fee is currently 1%. Ethpool offers e-mail monitoring of your work in progress and e-mail notification of found blocks.  Ethpool has about 12,500 active workers and processes about 5 blocks an hour. Uncles (blocks that are almost correct) are paid on top of full block rewards.

Ethermine

Ethermine works on the PPLNS (Pay Per Last N Shares) payout scheme, which includes a luck factor in the calculation of the payment and favours loyal pool clients versus those that jump from pool to pool.

As with Ethpool, full Stratum support is available and payments are made instantly with the minimum payout being a single Ether. The pool fee for participation is also 1%. Ethermine promises all miners accurate hashtag reporting and low costs due to the efficiency of the mining rigs.

E-mail reporting and tracking is available on Ethermine as well as notifications of invalid shares and detailed per-worker and global statistics. Ethermine has more than 200,000 active workers and process about 35 blocks an hour.

Cloud Mining

As an alternative to Ethereum pool mining, a miner can use Ethereum Cloud mining, where instead of providing a Ethereum rig and combining resources, an organisation that specializes in cloud mining will do the mining on the miners behalf for a fee and then pays a percentage of the profit made.

Ethereum Hardware Wallet: The Most Secure Way to Store Ether

Ethereum is one of the most popular blockchain platforms of 2017. Released in 2015, the Ethereum platform features smart contracts and lightning fast transactions. The token used to run the Ethereum platform is called Ether.

For the purpose of this article, we are going to use Ethereum and Ether interchangeably. Like Bitcoin, Ethereum uses a public and private key system. The public key being similar to an email address and the private key being similar to your password.

The holder of Ethereum is responsible for protecting their private keys.

Mining hardware is incredibly expensive and it is foolish to store mining profits on exploitable software and hardware. It was recently discovered that the Jaxx software wallet stored private keys unencrypted.

Ethereum Hardware Wallet

One of the oldest and most secure ways of securing cryptocurrency is by using paper wallets. The problem with paper wallets, is that a lot can go wrong when creating them. For example, a paper wallet created on a computer connected to the internet is technically a hot wallet.

This is because paper wallets make the private key visible. There is no way to know who may be snooping around your computer while it is connected to the internet.

The better option is to use a hardware wallet. The two most popular Ethereum hardware wallets are the Ledger Nano S and the Trezor.

These wallets function as external USB drives that store your private keys and encrypt them using a mnemonic backup phrase. This makes storing and securing your Ethereum user friendly. Because even if you lose the hardware wallet, you can always restore your Ethereum using the mnemonic backup phrase.

A mnemonic backup phrase is usually a list of easy to remember words that can be stored in multiple locations.

The Ledger Nano S is the easiest to use, of the two, because it features it’s own Chrome app. The downside is that delivery has been slow.

Trezor, the oldest of the two, secures your private keys using the open source website MyEtherWallet. There is a bit of a learning curb connecting MyEtherWallet with Trezor, but the upside is that Trezor is a solid Bitcoin hardware wallet as well. The Ledger Nano S can be configured with MyEtherWallet as well.

Trezor has been around a long time and during the Bitfinex hack, it was joked that it could have been prevented by using a Trezor hardware wallet. No matter which hardware wallet you choose, both are going to be better than storing your coins on an exchange, your computer or your phone.

For more information, see our full article on trezor vs Ledger Nano S

How does one become a holder of Ethereum?

A person can convert fiat to Bitcoin and buy Ethereum with Bitcoin via an exchange. A popular option is a company called Coinbase. Alternatively they can mine Ether themselves with using ethereum mining hardware, or an ethereum cloud mining service.

An upside of building an Ethereum rig is that it can be configured to mine other cryptocurrency as well. If you’ve built your own rig you need to decide whether you want to mine on your own, or collaborate with others as part of an ethereum mining pool.

Using an ethereum mining calculator, one can determine exactly how profitable your mining will be.

Altcoin Wallets

A popular method of storing cryptocurrency online is in a software wallet. Check out our full article on finding the best altcoin wallet for more info.

Ethereum Mining Hardware

Ethereum was launched in 2015 and has been hailed by the Telegraph as the “rising star of the cryptocurrency world”.

Since the launch of the currency, it has grown in value by more than 2300% and is the second most used cryptocurrency after Bitcoin. The advantage of Ethereum over Bitcoin is that the technology allows for not just currency to be traded on the platform, but also applications.

As with other cryptocurrencies, you can purchase them through an exchange, but you can also mine them yourselves using specialist Ethereum Mining Hardware.

Ethereum Mining

Miners of Ethereum will work to earn “Ether” as a crypto token instead of earning bitcoins. Ether can be used for trading as a currency as well as for payment of transaction fees on the Ethereum network.

Using the correct mining hardware will help you save costs when mining for Ethereum, however before you purchase mining hardware it is important that you have an ethereum hardware wallet to safely store your coins. Consider the Trezor vs Ledger Nano S wallets.

Ethereum Mining Hardware

In order to mine Ethereum, you will need a computer with a GPU (instead of a standard CPU).

The better the GPU, or graphics-processing unit, the faster the hashing power of the computer, which equates to more calculations possible per second.

It is important however to take the cost of electricity into account when purchasing a GPU.

The more powerful the GPU, the higher the electricity consumption will be.  To calculate the estimated costs more accurately, find an Ethereum mining calculator and enter the numbers relevant to your requirements, investments and electricity costs.

Hardware can be purchased at different capacities from $200 upwards.  The Raedon R9 295×2 is said to have the highest hash rate of all Ethereum rigs and so will give you the biggest returns on money.

Ethereum mining rigs can be dedicated to Ethereum mining only or can be a computer that performs any other necessary tasks and does mining on the side.

Should the price of a mining rig be beyond your budget, it is also possible to build your own Ethereum rig from basic computer parts. You will need GPU’s, graphics cards, motherboards, and power supply units. Each GPU will need about 200 watts of power. For more information on building your own rig, click here.

Ethereum mining is said to be resistant to application-specific integrated circuit (ASIC) as Ethereum contracts can include any type of computation and therefore ASIC’s would not add any benefit to Ethereum mining.

Ethereum Cloud Mining

Ethereum Cloud mining is a good alternative for potential miners that do not want the expense and maintenance of owning their own hardware. By signing a contract with a company that does cloud mining and depositing your money, you can be active as a miner almost immediately.

It is important to ensure the company you contract with is reputable and will not disappear with your money. Large cloud mining companies can keep their costs down due to the large volume of hardware and data they purchase and can therefore pass better earnings over to you.

Of course the downside to cloud mining is that you will be paying a percentage of the profit over to the company managing the hardware and mining in your behalf.

Mining Pools

If you’ve already made the investment in hardware, you could join an Ethereum mining pool online to help share resources.

See our comparison of Ethpool vs Ethermine here or read more about the top ethereum mining pools

Ethereum Investing

Mining is not the only way to invest in Ethereum. You can purchase a wallet and buy Ethereum through an online discount broker. Selected broker has a breakdown of the best Ethereum brokers online to assist you. This is of course a far less time consuming manner to invest, however the risks are greater as the currency is fluid and volatile.

Ethereum has made a significant impact on the cryptocurrency market and is considered to be a better investment than Bitcoin.

Ethereum Mining Calculator

There is growing interest in Ethereum Mining.

And it is quite natural that every Ethereum Miner is interested in increasing the return and profitability of their efforts. An Ethereum mining calculator is an essential tool that will help you work this out.

Ethereum Profitability

Rather than purely focusing all efforts on your Ethereum RigEthereum Cloud Mining Services or other hardware elements, it is important to think about all the other metrics that will impact earnings in both Ethers (ETH)  and Dollars ($ / £ / €).

Of course no Ethereum Miner is interested in losing the value of the investment and efforts. In a given duration, say a day, week, month or years what are the estimated earning and profit is of paramount concern.

Ethereum Mining Calculator

We have already seen that there are quite a lot of variables in Ethereum Mining that can contribute or affect Ethereum profitability.

Over time Ethereum Mining difficulty is increasing as is the case with other cryptocurrencies. Mind here that the Ether conversion rate or vale of Ether is growing sometimes exponentially.

The Ethereum Mining Calculator and Profitability Calculator is used to know what we can expect to get with what we plan to do and if we alter the metrics what we can expect to get from Ethereum Mining.

So, it is most essential tool and calculation that every Ethereum Miner MUST have knowledge and details. Fix your goals, know what you are current metrics are, know how alterations can affect your profitability. All with Ethereum Mining Calculator.


Ethereum Mining Online Calculators

There are some online Ethereum Mining Calculators available which the miners can make use of readily. Also, when miners are going in for Ethereum Cloud Mining services, the service itself can be of help in providing quick information.

The following are some indicative Ethereum Mining Calculators to have a look at.

Ethereum Mining Hash Rate

Ethereum Miners can work as solo miner or in an ethereum mining pool. While working in a pool, there may be a pool fees and pool efficiency also matters in profitability.

See our comparison of mining pools Ethpool vs Ethermine

The key metric in calculation is mining power or hash rate. How powerful mining operation or how powerful our Ethereum rig can be, is all known by the main metric Hash Rate. A hash or hash rate is the output of a hash function which is the speed at which a compute is completing an operation.

As similar to computing processor clock cycles, hash rates also go as:

  • 1 MH/s = 1,000 kH/s
  • 1 GH/s = 1,000 MH/s
  • 1 TH/s = 1,000 GH/s

Ethereum Mining Difficulty, TH

There are simple Ethereum Mining Calculators to advanced Ethereum Mining Calculators; depending on how many metrics they take it as inputs and how many inputs they assume as average given figure.

A simple Ethereum Mining calculator takes in to Hash Rate input assumes all other metrics including electric power consumption and rate and calculates ethers and dollar value.

An advanced calculator may take into more metrics than electric power in watts, power cost in kilowatt per hour, ethereum mining hardware cost, adding to block time, difficulty factor, network hash rate, exchange rate etc.,

As mentioned Ethereum Mining difficulty is increasing and can be seen in this page; or here.

Difficulty is usually expressed in TH unit and refers to the probability of finding the hash.

Final Thoughts

To make any money it is imperative that your mining is done as efficiently as possible.

Ethereum Mining Calculators come in handy as a compass to set the right direction and navigate our way towards mining profitability.

Ethereum Cloud Mining

For those interested in mining ether, but don’t have the technical expertise to get set up with their own hardware, ethereum cloud mining could be the perfect option. 

Ethereum Mining Options

If you’ve looked into mining your own crytocurrency, you may well have considered building or buying an ethereum rig.

You’ll also know that the task in hand required very high computing power! And whether it is buying a rig or building one, it involves capital investment upfront and of course some time and efforts. Not to take into account the nitty gritty of hardware, software installation, integrations, and making it all work together for the whole time.

Fortunately there is another option…

Ethereum Cloud Mining Services

Just before diving in, let us also consider another option, Ethereum Cloud Mining and its details in brief. Of course as any other one, this option also goes with its own pros and cons.

In the age of everything available as a service, there are dedicated cloud mining services too. And that services presents itself a really serious and attractive option.

Cloud Computing

Computing power has been available as a service for quite some time now, including Infrastructure As A Service (IaaS), Software As A Service (SaaS) and Platform As A Service (PaaS).

Software Applications are also bundled with these services and made available readily to everyone who want to start anything. In recent times it is a real success that it is considered even before opting for owning the equipment.

A decade back it all started as an innovative alternate option but now cloud computing is the first option. Examples of globally leading services are AWS – Amazon Web Services, Microsoft Azure, Google Cloud, IBM Cloud etc.,

It is quite natural that cloud mining services also emerged quickly and being adapted. There are some distinctive advantages of cloud computing which leads to its success and adaption.

Ethereum mining pools

If you’ve already invested in ethereum mining hardware but would like to find a more collaborative way to mine for ether, you could consider joining an ethereum mining pool.

Ethereum Cloud Mining Benefits

When considering Ethereum Cloud Mining Services, on the one side this job being one that requires costly computing power and on the other side there some service providers emerging as attractive services – well these make it more attractive and tend to push towards the solution.

All one need to do is sign up for a service and start doing the work of mining Ethers. An Ethereum Miner starts the work of mining without having to worry too much about Ethereum Rig, Ethereum ASIC, Ethereum Hardware, the hassle maintaining the hardware/software etc.,

These services seems to be solving some more issues like:

  • efficient cooling,
  • technology upgrades
  • more statistics,
  • better pool allocation etc.,

Not to add the benefits of easy realization of rewards, trading options etc.,. It should be mentioned that Ethereum is moving to PoS (Proof of Stake) from PoW (Proof of Work) and some of the old rigs built used for mining may become unusable for this purpose.

Leading Ethereum Cloud Mining Services

There so many Ethereum Cloud Mining services available now. We will discuss only market leading or emerging innovative service providers.

It should be mentioned that some Ethereum Miners are also using leading mainstream cloud computing services like AWS, buying the computing instances from them and setting up mining rigs.

And there are pure play cloud mining services. These pure play cloud mining services are the easiest way to get started and so being discussed here in this article. Service offering features may vary between different service providers and miners experience may also vary as mining is a complex process that not only depend on the rig but also with some external factors.

Some of the service providers include:

  • Genesis Mining
  • HashFlare
  • HashMining

At this point as an extra cautionary alert, we can site some of the disadvantageous as these

  • recurring fees service may be higher operational cost reducing the profitability
  • and some scam and default of pay-out risks by service providers.

It should be a general advice to new miners to go for established, trusted service in the market.

Ethereum Cloud Mining – Distinctive Advantages

Keeping aside the CAPEX (capital expenses) and OPEX (operational expenses) part let us look at what are the distinctive advantages that Ethereum Cloud Mining services presents.

One as we have already seen is instant start-up. We can sign up and start. Go for a contract offering period that is suitable to us.

Since Ethereum Mining is a hardware computing power intensive activity, cloud service provides flexible options for choosing and scaling the mining activities. When buying and owning we cannot expect or get this flexibility. Cloud mining service providers’ servers are usually kept in high standard datacenters that have:

  • better network connections
  • cooling power
  • power efficiency
  • security standards

And service goes with service level agreements and guaranteed uptime. Plus there is 24/7 customer service to get technical issues sorted out or support for mining service issues.

Ethereum Cloud Mining Contracts

Cloud mining contracts offered by cloud mining companies like Genesis go as small, medium and large. Small contracts start with 1 Mh/s, Medium at 25 Mh/s and Large at 100 Mh/s and you can note current rates and pay-out in Genesis site. Fixed hash rate contract for fixed duration is easy to start-with. Cloud Mining Services definitely offer attractive benefits to consider and get started with Ethereum Mining.

An ethereum mining calculator will help you assess how profitable your approach will be, which will in turn influence your choice of hardware.

Once you have mined your ether, you may want to invest in an ethereum hardware wallet as a secure way to store your currency.