Ethereum Mining Tips for 2021
I built an Ethereum mining rig in 2020 — here are some tips for cryptocurrency miners in the year ahead.
I built an Ethereum mining rig in 2020.
The kicker — I built the Ethereum mining rig for under $1,000 AND I also got it up and running right before a major bull run.
The timing of the crypto bull run was a complete coincidence.
I gathered parts for my rig throughout the year and just happened to start mining before the market exploded.
The writing was on the wall for a crypto bull run though.
2020 had plenty of bullish indicators, like endless quantitative easing and an influx of institutional and retail money.
If you want to know the specs and story behind the Ethereum mining rig, read the original post. I also posted an update on how mining is going several months in. You can read the update here.
Let’s Talk About 2021
Let’s break down some topics to pay attention to in 2021.
I first came across Bitcoin in 2012 and was fortunate enough to be paying attention to crypto when Ethereum hit the scene.
I didn’t start mining until 2020 though.
Not only do I HODL Bitcoin and Ethereum, but I also mine Ethereum on my GPU mining rig.
Mining has given me a whole new perspective on crypto so let’s dive deeper into the topics that matter to Ethereum mining in 2021.
Impact of ETH 2.0
For Ethereum and GPU cryptocurrency miners, Ethereum 2.0 is hands down one of the most important topic to watch in the coming year.
Fortunately for Ethereum miners, I think we have the runway to keep mining beyond 2021. Consensus seems to be that miners have roughly a 2–3 year window to GPU mine Ethereum.
Quick pause for clarification.
What Is ETH 2.0?
If you’re not familiar with Ethereum 2.0, let me provide a short explanation. Prior to ETH 2.0, Ethereum used uses a proof of work (PoW) system.
What is a PoW system?
It means that Ethereum miners use their computers to spend time and computing power to solve complex mathematical problems.
Solving these problems verifies transactions on the network and miners are rewarded for their efforts.
PoW is the whole reason to mine.
You get to earn Ethereum just by having your rig up and running. In my case, I’m in a mining pool which increases my chances to earn ETH.
I receive my share of the Ethereum rewards from the mining pool, deposited directly into an Ethereum wallet that I own, roughly every week.
Back to ETH 2.0
Ethereum 2.0 launched in late 2020.
The primary reason I bring it up is because ETH 2.0 is transitioning the Ethereum network from a PoW system to a proof of stake (PoS) system.
Eventually, mining Ethereum is going away. Instead, Ethereum holders will be able to stake their ETH and earn rewards for doing so.
The silver lining for miners is that it doesn’t look like we’ll be impacted by ETH 2.0 in the year ahead. While we likely have a 2–3 year runway before we need to consider what we do with our Ethereum mining operations, it is something to start thinking about.
GPU Shortage
Entering 2021, there’s a shortage of graphics cards.
The two main reasons for the shortage:
- COVID accelerated remote work and gaming
- Crypto bull market accelerated GPU mining
The at-home economy was the winner of 2020. Chipmakers boomed throughout the year. More people at home meant they were upgrading their tech setups in their houses. AND, gaming thrived.
Any hardcore gamers or even those on the cusp of becoming a gamer, took full advantage of being at home in 2020. Many gamers made the decision to upgrade their setup.
There’s sometimes a tension between GPU cryptocurrency miners and gamers. Both are often “competing” for the same graphics cards.
Currently, there’s a shortage.
Get Your GPUs When You Can
In terms of actionable tips for 2021, this is probably the most important. If you come across a GPU you’re looking for, get it while you can.
I upgraded my mining rig shortly after it was up and running by adding two GPUs. Read more about the upgrade here.
In hindsight, I wish I would’ve purchased even more cards then instead of spreading out my upgrade budget over a longer timeline.
At the time, my plan made sense.
Get the rig up and running, start earning Ethereum, and upgrade the rig as I allocated more funds toward my mining budget over time.
The crypto bull market hit before I could act. Plus, the GPU market was already stressed from COVID and an increase in gaming. It was the perfect storm for a GPU shortage.
Be opportunistic in your approach to finding GPUs in 2021.
Search eBay, forums, and check on any vendor’s site to see if you can get them prior to any markup right when they’re available.
Simplify Your Mining Operation
There is beauty in simplicity.
That applies to Ethereum mining as it does to most things. The year ahead is a chance to simplify and streamline your mining operation.
2021 is starting amid the bull market. Ethereum really joined the bull run in mid to late December. Prior to that, it was all Bitcoin.
There’s a good chance Ethereum continues to push upward if the overall market remains bullish. As of writing, Ethereum’s price is still roughly half of its all time high. It has a lot of room to run.
It can be overwhelming to witness a massive bull run. Don’t panic when numbers go up. Don’t let that lead your mining approach astray.
I recently consolidated my cryptocurrency holdings.
What do I mean by this? I cut down on the number of wallets and addresses that I use. I also cut back on the types of transactions I was making.
When it comes to my Ethereum mining, I don’t mine to an exchange-based wallet address. You can — I just don’t. This isn’t advice either way but I prefer to hold my ETH in a wallet where I am the true custodian.
A new year is always an opportunity to evaluate any of your behaviors. It doesn’t have to be how you hold your Ethereum or other crypto. That’s just one example of something to consider.
Maybe you need to spend some time cable managing or cleaning your rig. Go for it. Maybe you’d like to sort out your system of accounting related to your mining. The start of the year is a great time to think about what you can do to simplify and improve your mining experience.
Get More Involved
2021 provides a chance to get more involved in the cryptocurrency mining community. GPU mining is still going to be a big thing for a while.
Stay in touch with other miners.
Join some forums.
You’ll find plenty of tips about troubleshooting or what’s new in mining there. I like Vosk Coin Talk and Red Panda Mining but there’s a lot of forums and YouTube channels to check out.
Thanks for reading! I am not an investment or financial advisor. This is not financial advice. All opinions expressed are mine alone. If you want more content like this, sign up for my weekly email.
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