The Ethereum Report – An introduction to Ethereum

Ethereum Basic Introduction.


ETHEREUM-LOGO_PORTRAIT_Black_smallEthereum is a crypto currency, much like Bit Coin and 100’s of others.  It is superior to bitcoin in its technology and also the way it is mined.  It currently has a market cap of 1.1 Billion Dollars, while bitcoin is at about 8.4 Billion Dollars.  No other crypto currency has over a $250 million market cap.  Ethereum is a method of paying for micro transaction, and also doing secure contracts with other people that are executed based on a computer programing language.  You can use this for an escrow or many other useful things.  All of this trading takes a large amount of computing power.  Also, for security you want to have a large amount of people verifying all transactions publicly.  While the transactions are done where everyone can see them, no one can see who is doing them…all they get are long account numbers, and anyone can create as many account numbers as they want for free, so it is anonymous.

The designers of Ethereum also created a mining system, where a person can make their computer “mine” for Ethereum.  It works much like the stock market, and you have a job with a company and each person gets paid in stock, based on how much they work.  Once you earn that stock you can do whatever you want with it.  You can change it into other currencies, you can spend it, but most commonly people cash it out for local dollars, yen or euros.  What is interesting is that the amount of stock given out is always the same, 5 shares every 12 seconds.  Currently that is 36000 shares per day, or 1.08 million shares in a 30 day month.

The “work” that you do is called mining, and it is done by your computer, helping the network encrypt things and process transactions.  The work is measured in MegaHash per second.  We simply call it MH.  The entire workforce does about  3,200,000 MH, all of these shares are paid out based on how much work your computers do.  At this rate 1,080,000/3,200,000=1/3 share per month for each MH of work you do.  The amount of work the world does is going up each month, by about 20% per month, but the price of the stock you are earning has been going up by about 40% per month.  So the amount of dollars earned per MH actually has been going up each month.  As of June 1st each share is $13.60.  It usually goes up and down about 5% in any given day but on average has been going up about 10% per week.    So as of June 1st each MH should make you $4.50 per month.

Ethereum is traded on many exchanges, the biggest in the USA is Bittrex while in Europe it is Kraken.  The quickest way to get an Ethereum address is to open a free account with either of these companies and then to try to deposit Ethereum, they will generate a deposit account number for you, and this will be the account number that you give out when you want to receive Ethereum.


flat,1000x1000,075,fA typical mining computer can easily do 20MH while we feel that the best return for your investment is in a computer that does about 40MH  As of June 1st a computer doing 40MH will earn you $159 per month.  Such a computer can be made for under $1000 with ease.  Of course when more workers come on the amount of Ethereum earned will go down, and the price of Ethereum to the dollar  could go up or down.   Because there is a limited supply of Ethereum, and more and more people are using it every day, growing at a much faster rate than the miners, the price is likely to explode, with most experts saying it will be well over $50 by the end of the year.

The best part is that these miner machines are also high end, high quality gaming class computers, these computers do not lose their value quickly.  You own the hardware, and can sell it whenever you need to for almost what you pay for it.

Emerald Computers has built many of these computers in the last few months, we have found out what works, and what does not work.  We have taken all the guess work out of building a system and made it easy for anyone to become an Ethereum miner.  You do not need to make a miner a dedicated computer, the mining happens only on the video card leaving the CPU to idle.  This means that you can use the computers at the same time, at my office and my home we are replacing or upgrading all of our computers to miners.

You can waste tons of money finding out how to mine, and in many cases never get there.  We have done all of the hard work and came up with rock solid designs.  These come preloaded with all the software you need to mine, and we will even test it and mine for at least a day, sending the proceeds to your account, before we ship it to you.  Everything will be set up and ready to go, all you need to do is turn it on and hook it up to the internet.

We are selling computers in 4 different levels.  Please do the math to figure possible returns.

  • BASIC – We have a limited supply of basic used computers that can have enough cooling and power to run a good video card that puts out 13-14MH.  We will guarantee 12MH.   It comes with 4GB RAM and a 160GB Hard Drive, on a nice Core2Duo CPU.  These sell for $450 each.
  • MID – These are bigger computers, with better power supplies capable of doing 18-21 MH.  We will guarantee 18MH.   They also come with 4GB RAM and 160GB Hard Drives.  These sell for $650
  • DOUBLE – This computer comes with a much better PSU and two of the video cards that the Mid Computer has giving it 36-42 MH.  We will guarantee 35 MH.   These sell for $950 each. (This is our most popular model so far.)
  • TRIPLE – This computer has a massive PSU, and three of the video cards.  It gets between 54 and 63 MH, we will guarantee 50 MH.  These sell for $1295.   As of June 1st these would return $270 per month, giving you all of your investment back in about 5 months.

There are video cards that can produce more, but they are not as cost effective as the cards that we use.  Also there are motherboards that can take up to 6 cards, but we have found that this becomes unstable, is hard to mount in the case and requires too much power from the PSU.  It is more cost effective to build 2 triples than a single 6 card rig.  Our rig designs are the most cost effective way to build these mining rigs at this time and scale.

To make any of these computers into a user computer we suggest upgrading the RAM to 8GB, which costs only $30.  Also you can get a 250GB HD for just $10 more, 500GB for just $25 more, or 1TB for just $45 more.  For more speed on your computer we highly suggest getting a SSD Drive, 240GB would add just $85 to any system.  You can use your computer for anything you like while mining, but to get a good gaming experience we suggest that you turn off mining while you game.

Of course all of these systems run on power, and also create heat that must be cooled.  We figure that the cost of running and cooling these systems during the summer will eat about 20% of your earnings.  In the winter this number is much lower because you have little need for cooling, and it will actual become a nice heater for your home or office, saving you money on your heating bill.

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Ethereum was designed, on purpose, to be hard to mine, so that only the dedicated people can do it.  The miner software uses something called a DAG file, it is a highly encrypted huge file that contains the code needed to mine the Ethereum.  Because we are computer people we have found that there is a major flaw in the DAG system, this is likely by design.   The problem is that the vast majority of all GPU cards don’t have enough RAM.  You currently need a 2GB Card to process the DAG.  Over 80% of computers do NOT meet this requirement and can not mine.   Of those that do, 80% plus only have 2GB of RAM.  But the DAG is getting bigger every week, and in a few months all of these miners with 2GB cards will stop mining, this will cause those who have 4GB cards in their computers to earn much more Ethereum per MH because the majority of miners will need to upgrade or not mine.  I think most will simply change to other coins that pay less than Ethereum rather than upgrade their hardware.  This gives a great profit opportunity for those that use 4GB cards.  Here at Emerald Computers we only use 4GB cards in all of our mining rigs.

Advanced Ethereum Concepts

Of course the basic description has been very simplified so that the reader can take it all in.  I will now go into more detail for those that require a deeper understanding.


When you mine for Ethereum it is a lot like a lottery, one winner wins the 5 ETH every 12 seconds.  I figure that there are about 160,000 computers worldwide mining ETH at this time.  So your odd of winning this lottery would only be about just once per month if you have a 15MH machine.  Because this is almost all miners are part of a pool.  The top two pools generate over half of all mining wins.  If you are member of these pools then you are paid out a little bit every time anyone in your pool wins.  Because of how large the pool is this means you get a little bit of ETH a few times per minute.  After you have 1 full ETH in your account the automatically transfer all of your ETH to your account.  If you have 100MH total worth of machines this means you will get an ETH about once per day currently.  The pools usually take 1% of your ETH for providing this service.


You want your miners working all of the time.  If you are working in a pool then you must request this work from the pool.  Sometimes this can take a while because 1000’s of miners all over the world are hitting just a few pools.  .  Which could cost your miner 10% to even 20% of its output.  To solve this you can make one of your computers become a proxy, the proxy will request a lot of work in advance, and then your miners will request work from your proxy.  Your proxy only serves your miners and is on your local network so the speed is very fast.  We figure that one proxy can support at least 50 miners with ease, and you can run the proxy software in the background on any of your miners.


If you would like to be able to create Ethereum accounts, also called addresses on your own computer you will need a node.  This will require you to download the entire, massive, blockchain, you also will need to run software such as GETH of the Ethereum Wallet to run your node.  If you run a node then you can directly send and receive Ethereum on your computer.  If you simply want to mine there is no reason that you should do this, unless you like the fun and the challenge.

Day Trading

There are many different Crypto Currencies, they are constantly trading up and down.  Everything trades in relation to BitCoin (BTH).  There about major currencies and 100’s of others.  With the Ethereum engine you can actually create your own coin if you want to go through the expense of properly managing it.  One coin created from Ethereum is the DAO.  It currently has a market cap of over $151 million dollars.  Many of the smaller coins are very volatile.  Also buying and selling crypto currencies is very cheap, Bittrex, for example, takes just .25% of each transaction, no matter how small.  So a $10 transaction will cost you under 3 cents.  This makes it really easy for people to jump in and out of various coins all day long.  In addition to that, you can place limit orders and buy when it dips to a specific price and then sell when it gets to another higher price.  I have had coins where I buy them at one price, then put a sell order in for 60% of the shares at a price high enough where I get all my BTC back and I get to keep the 40% as profit.  I have done this a few times to great success. is a good website for this research.  Many people make good incomes just buying and selling various coins as they go up and down.  There are even sites like Kraken that will give you 5 to 1 leverage, and BitFinex that lets you short coins.

Merchant Services

If you want to get your ETH out as cash you need a merchant type company.  Coinbase seems to be the best for buying BTC with cash and selling BTC into cash.  Of course you can trade you ETH into BTC with ease on Bittrex or any of the trading sites.  If you have a business you can use Coinbase to let people buy from you and have the money deposited into your account as BTC or as Dollars.  Another great advantage to using a crypto currency as a merchant is that the transactions are irrevocable.  There are no chargebacks, there is no way the buyer can get their money back, making it much safer for sellers to sell.


Most BTC or ETH accounts are called wallets.  Your account number is called an address.  Wallets are free from 100’s of different sites, so go ahead, and create as many as you like.  You can even put a wallet on your phone.  Send a small amount from your main account to your phone, and then you can spend it by taking a photo of a QR code with someone elses account.  I use the Mycelium app for this, but I hear there are better apps, and now there are apps that can also store ETH in them. In addition to store BTC in “cold storage” by transferring it to a specific address that is generated for you.  This address stores the currency and anyone that gets this address can withdraw the contents and transfer it to their account.  With this you can actually take some BTC convert it to an address, convert that address to a QR code, print out that code, fold it up and put it somewhere safe.  99.9% of people who see it will have no idea that it is worth something.

Anonymity, Democracy and scams.

A lot of people like BTC and ETH because all of this can be done without anyone watching, any government or other people.  No one knows who is trading anything unless they out themselves.  A lot of freedom minded people see this as a way to buck the system, and get away from the Dollar or the Euro.  On the down side there are a few criminals who have used this system to do wrong things.  It simply is a tool, like your computer, and can be used for good or evil.  Technology amplifies the intentions of the user, so bad people can be more bad but good people can do more good.  For example I can mine and send that money across the globe for free and donate to someone.  Because it is Anonymous and can not be regulated by governments many things have popped up that are illegal in many places, such as massive casinos that actually pay good returns and are fair because depositing and withdrawing are easy.  There are giant Ponzi and pyramid schemes, there are huge markets selling everything from illegal drugs to stolen/hacked bank information and much more.  Because the buyer can not get their money back once sent if you buy anything from these sites you could be scammed.  You must be careful when sending money to sites that offer things that are too good to be true.  Of course if you do something bad enough people in the government will try to track you down.  With the power of Anonymity people become their true self, it is the true test of if you are good or bad.  More info about scams can be found

The entire concept behind The DAO curreney is that you can use your “coins” as votes for where the DAO invests the money it has received.  There are actual real businesses using this as a way to crowd source funding for their business.  Each DAO you own is one vote.

More Info

There is a ton of information out there about this subject.  This document was meant has a quick primer for someone who is learning about all of this for the first time.  It was also meant to introduce you to our products and company.