Ethereum platform has an unlimited supply of coins, but it has an annual maximum supply of 18 million ETH. Ethereum has an inflationary supply style. On the Ethereum platform, it produces and spends a lot of new Ether every day. As the amount of ETC increases, the coin will steadily lose its value. Therefore, Ethereum promotes spending and lowers entry costs for the newcomers.
The several types of mining Ethereum are listed below:
1. CPU Mining: While doing CPU mining, it utilizes the miner's central processing unit for mining Ethereum. Earlier this used to be a viable option, but now it is declined in popularity due to dwindling profits. To begin CPU mining Ethereum you need a computer and some software programs.
2. GPU Mining: This type of mining is one of the most popular methods of mining cryptocurrencies, including Ethereum. The miners simply use one or various graphics processing units to mine Ethereum. It's efficient and relatively cheap to build a mining rig comprising GPUs. A standard Ethereum mining rig requires a motherboard, a processor, and a rig frame, which houses the graphics cards.
3. ASIC Mining: Application-Specific Integrated Circuits (ASIC) refers to the specific devices that perform crypto mining. Compared to the above methods, ASIC mining produces lots of ETH because of its immense computational/processing power. In fact, the miners who use CPUs and GPUs can't keep up with the ASIC miners with regards to hash speeds and earnings.
4. Cloud mining: Cloud mining is one of the best ways to mine Ethereum. It's a process where miners pay an entity to rent out their mining rigs. An agreement is made in which it states that all the earnings the rig makes will get transferred to the miner's crypto wallet. However, one disadvantage of cloud mining is that the individual has to pay the funds upfront, and it will not get its money back if the ETH's price drops. Moreover, it won't be able to change the software and hardware provided by the cloud mining company.
5. Solo Mining: Although solo mining or mining alone may appear to be a plausible method of mining, the competition is pretty high because of the number of participants involved in the network. This method will be profitable only if you have enough resources to have a big presence in the network. Moreover, maintaining many mining rigs will tremendously increase your electricity bills, especially if you install more than ten graphics cards.
6. Pool mining (recommended): In this type of method, a group of cryptocurrency miners come together and combine their computational resources into a mining pool. This strengthens their possibility of gaining a block, leading to more profits.