Ether Mining 101Conor Svensson

@conors10

What

• Ether is the fuel of the Ethereum blockchain

• Pays for smart contract execution in the Ethereum Virtual Machine (EVM)

• Also a stand alone crypto currency (Gemini recently licensed for trading it by NY regulators)

Why?

• Speculation

• Where will Ether be in a year?

• Fun

• Combines DIY, computer hardware assembly, operating system installation/management, scripting + Ethereum

Price Performance

• Highly Volatile (68–95–99.7 rule)

• Annualised standard deviation (volatility) 119.63%

• ASX volatility during this period 21.95%

USD/ETH Price History

How does it work?• Miners continually trying to verify blocks for the blockchain

• 5 ether reward for each solution

• Based on Cryptographic hash function

hash(<block>) => a7ffc6f8bf1ed76651c14756a061d662f580ff4de43b49fa82d80a4b80f8434a

• Miners applying hash function millions (mega) of times/sec = MH/s

• Single GPU generates 5-30 MH/s

• CPU ~ 0.25 MH/s

Ethash Algorithm• Ethash Proof of Work algorithm (formerly Dagger

Hashimoto)

• SHA3-256 variant hashing function

• Memory-hard computation

• Memory-easy validation

• Can’t use ASICs (Application Specific Integrated Circuits)

• Uses 4GB directed acyclic graph file (DAG) regenerated every 30000 blocks by miner

Proof of Work Difficulty• Hashing blocks

• Difficulty - dynamically adjusts parameter defined originally in genesis block (one block produced every 12s)

• Started at 0x400000000 (0.017 TH)

• Now at 0x3205AF767000 (55 TH)

• Simplified example:

nonce = random int

while hashimoto(block, nonce) * difficulty > threshold

increment nonce

return nonce

Fetches bytes from DAG + combine with blockReturns SHA3-256 hash

Solution

Genesis Block{

"nonce": "0x0000000000000042",

"timestamp": "0x0",

"parentHash": "0x0000000000000000000000000000000000000000000000000000000000000000",

"extraData": "0x0",

"gasLimit": "0x8000000",

"difficulty": "0x400000000",

"mixhash": "0x0000000000000000000000000000000000000000000000000000000000000000",

"coinbase": "0x3333333333333333333333333333333333333333",

"alloc": {

}

}

Set to a low value in test networks

Getting Started…

Profitability

Ether mined * ETH price

-

(Hardware + software + power + hosting + your time)

= Profit

HardwareParts:

• 4-6 x GPUs - Radeon series (better OpenCL support), avoid Nvidia

• Motherboard - lots of PCIe slots

• PCI Risers (try fitting > 2 GPUs on a single board)

• Decent power supply ~ 1000W for 3 GPUs

• Cheap CPU

• 4-8GB RAM

• Power switch - to avoid this

Motherboard

PCIe slots

(ASRock H81 Pro BTC)

Motherboard quirks• Some boards require jumper cables in their PCIe

slots

Risers

Motherboards can only hold 1-2 GPU cards

Case

• Build or buy?

• Considerations

• Budget

• How comfortable are you with DIY?

Case - Wood*

Cost ~$25 AUD

* Combusts at ~300°C

Case - Wood & Metal

Cost ~$50 AUD

Or even milk crates…

Case - Buy

$200 USD from GPU Shack

Software - OS• Linux

• Ubuntu 14/15 with fglx AMD GPU driver

• Avoid Ubuntu 16 (http://www.omgubuntu.co.uk/2016/03/ubuntu-drops-amd-catalyst-fglrx-driver-16-04)

• Windows

• EthOS ($40 USD)

• Ether mining Linux OS from GPU Shack

Software - Ethereum• Geth/Eth

• Run full Ethereum node

• Or

• Connect to a mining pool (see next slide)

• ethminer

• C++ mining client

• Connects to Geth/eth

Mining Pools• Block reward is 5 ether

• For small rigs => long wait (weeks)

• Steady stream of income (pool splits block reward between contributing members)

• ~1% fee of all ether mined

• Provide UI for monitoring workers

• Usually go via a proxy (eth-proxy/qtMiner)

• Provides automatic failover in event of pool failure

Begin Mining w/Pool

• Start proxy:

$ python eth-proxy.py

• Start the miner

$ ethminer --farm-recheck 200 -G -F http://127.0.0.1:8080/<node-name>

Mining

Hashrate

Submit proof of work

http://ethermine.org/

Other Considerations

Power is Expensive in Australia

Source: https://www.ovoenergy.com/guides/energy-guides/average-electricity-prices-kwh.html

Power

How much are you paying per kWh?

• Australian plans often have an advertised rate cap - e.g. quarterly cap of 4000 kWh

• 1 x 1000W PSU (3-4 GPU rig) running 24/7:

1 * 24 * 30 = 720 kWh per month

Power MetersMeasures:

• Current consumption (W)

• Consumption used (kWh)

Costs ~$30

Managing FailureMultiple points of rig failure

• Hardware - GPU x 4-6, risers x 2-5, motherboard PCI slots => lots of variables

• Software - problematic device drivers

• Time consuming trial and error to isolate issues - e.g. jumper cables required on some model PCIe slots

MonitoringVarious components:

• Node or Pool connectivity

• ethminer

• it occasionally falls over

• GPU temperature

• On Linux requires X Server to be running

• CPU temperature

• OS crash

Monitoring• You’ll need to write various scripts (or use

EthOS)

• Take action

• Send alerts - email/SMS

• Restart component

• Power off rig

What about the cloud?You’ll need lots of AWS credit…

AWS Spot Instances

• g2.8xlarge instance contains 4 x Nvidia GPUs

• Hashrate of 24 MH/s

• 0.0077 Ether/hour ~ $0.10 USD/hour

• Low spot instance price $2.66 USD/hour

Proof of Stake

• Nodes with greater stake (e.g. total # of ether, duration of holdings) more likely to generate valid block

• No longer possible to profitably mine ether (if it ever was…)

• Expected early 2017

Location• Do you have space?

• Make sure you get partner/spouse approval…

Thanksconor10@gmail.com

@conors10

Resources• Mining algorithm

• https://github.com/ethereum/wiki/blob/master/Dagger-Hashimoto.md

• https://github.com/ethereum/wiki/wiki/Ethash

• Costs

• http://etherchain.org/api/statistics/price - Ether price history

• https://etherscan.io/ether-mining-calculator - Mining calculator

• Parts

• Ebay

• http://gpushack.com/collections/gpushack - ready made rigs (US based)

• Pools

• https://github.com/Atrides/eth-proxy

• http://ethpool.org/

• Rig building

• https://www.youtube.com/watch?v=Jnp9Ka8WVpA - metal/wood rig

• http://highoncoins.com/litecoin-rig/how-to-make-diy-wooden-frame-for-litecoindogecoin-rig/ - wooden rig

• web3j

• https://github.com/web3j/web3j - Java library for working with Ethereum nodes