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Bitcoin's Price Surge Is Making Hobby Mining Profitable Again
- drpgq 9y agoWouldn't there be a big advantage to running a bit coin miner somewhere cold with cheap electricity like Quebec?
- 1ba9115454 9y agoYes. Some operations already do this, for example Genesis mining have a facility in Iceland.
- guiomie 9y agoIts not cold in the summer, and it probably too cold in winter to not have any interior climate control. With much lower cost of living and cheap electricity, China seems like a much better option, the majority of mining is actually done there.
- flashdance 9y ago> it's probably too cold in winter to not have any interior climate control Trust me, these miners put off enough heat that it's not an issue.
- gwbas1c 9y agoMais, in the winter, the waste heat is free heat. Basically, if you deduct the money that you would have spent on heat, the electricity is very cheap. Another way to think of it: The heat from a bitcoin rig is the same that you would get if you used an electric space heater or an electric baseboard heater. These cost about 2-3x as much to run as a gas or oil furnace. So, if you're able to turn off your heat and just heat with a bitcoin rig, your "cost" is less because you're not spending money on something else.
- gwbas1c 9y agoMais, in the winter, the waste heat is free heat. Basically, if you deduct the money that you would have spent on heat, the electricity is very cheap. Another way to think of it: The heat from a bitcoin rig is the same that you would get if you used an electric space heater or an electric baseboard heater. These cost about 2-3x as much to run as a gas or oil furnace. So, if you're able to turn off your heat and just heat with a bitcoin rig, your "cost" is less because you're not spending money on something else.
- seibelj 9y agoI have heard from a trusted source that people in Russia are buying graphics cards by the truckload and building mining farms, and getting free electricity by bribing utilities / government officials. So keep in mind that you are likely competing with Chinese and Russian miners who don't have the same costs.
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- zitterbewegung 9y agoYes, but the volatility of Bitcoin could make it not profitable again. Instead of buying a miner what if he took that money and bought bitcoin at that point of time. Wouldn't he have more money?
- sealthedeal 9y agothe difference is the miner continually payouts.
- lightbyte 9y agoYes, he'd have about doubled his money instead of breaking even.
- Frogolocalypse 9y agoThe premise of mining bitcoin is not really about being cost effective today, but taking a long position on its value, and what you perceive the value will be, for totally anonymous money at some point in the future. Because the profit earned from mining is pretty close to the definition of untrackable in a crypto.
- Retric 9y agoYou need to buy the equipment from some third party and hide your IP address. It's possible to do both while maintaining anonymity, but if you can hide cash transactions then bitcoin get's you zero net benefit while exposing you to new risks.
- Frogolocalypse 9y ago> You need to buy the equipment from some third party and hide your IP address. No. You don't. The other stuff is just confusing.
- solotronics 9y agowould it be better to just buy hold and use Bitcoin? mining adds slightly to the decentralized nature but I am curious about comparing buy and hold vs mine.
- ryan-c 9y agoMining anonymously is much easier that buying anonymously.
- mikeash 9y agoI think it depends on whether you think the price will go up, or merely remain high. Mining lets you make money even if the price remains stable, as long as it's already sufficiently high. To make money with buy and hold, the price needs to increase.
- ajc-sorin 9y agoBecause it's super easy to buy and hold Bitcoin, if it becomes more popular the value of mining rigs will increase. Right now, there's probably no material difference between buying the coin itself or buying the rig and mining, but eventually, it may become more pronounced. There are other benefits as well. Buying the mining rig is a sort of hedge in that if bitcoin drops to $0, you at least have some hardware that can be re-purposed/sold.
- aqme28 9y ago>Solis bought a Bitmain Antminer S9 on eBay for $2,400. >As of this weekend, Solis has mined 1.01 BTC, worth a little more than $2,584 in his bitcoin wallet. >Solis said: >"When I bought the miner, the price per bitcoin was around $1,200. I thought I’d break even in one year, but actually it’s been about five months." So he would have been much better off just spending that 1,200 on Bitcoin rather than on a mining rig.
- JumpCrisscross 9y ago> he would have been much better off just spending that 1,200 on Bitcoin rather than on a mining rig TL; DR Why economists don't like deflation.
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- danmaz74 9y agoEven more importantly, electricity costs weren't accounted for, while they should be pretty relevant.
- Analemma_ 9y agoAccording to its Amazon listing, the Antminer S9 consumes 1247 watts at the wall. Assuming he ran it 24/7, over a year he would consume about 11,000 kWh, or about $1,300 at the average U.S. electricity price of $0.12/kWh. Without knowing how much he was paying for power of course we can't know exactly how much he spent, but this certainly doesn't seem like a slam-dunk win, compared to just buying Bitcoins outright. And indeed, it couldn't possibly. The EMH almost guarantees that hobby mining can't be profitable once the coin is popular enough.
- Nursie 9y agoIncidentally, 11K kWh is roughly the average energy consumption of a US household. So given his current return, of 1.01 bitcoins, that means each 2.4 bitcoins mined use around the electricity that a US household does annually. And people wonder why there are those of us who are concerned about the environmental impact...
- imron 9y agoTime to party like it's 2013
- mtgx 9y agoBitmain is what's keeping Bitcoin from progressing right now. Stop supporting them with your money.
- 9500 9y ago/r/bitcoin leaking...
- projectramo 9y agohow so? I've never heard this before.
- paulpauper 9y agoIs it profitable because the mining is easier or because the price is rising. It's almost certainty the latter.
- kartD 9y agoI think this article is mistaken. People are mining Ethereum causing GPU prices to spike 2-3x. Eth is designed to use a lot of memory so GPU mining is always viable. GPU prices: https://camelcamelcamel.com/search?sq=geforce+1060 https://camelcamelcamel.com/search?sq=geforce+1060 Mining centric cards are being released as well: http://www.anandtech.com/show/11607/cryptocurrency-mining-cards-update-zotac-manli-biostar-products-formally-confirmed http://www.anandtech.com/show/11607/cryptocurrency-mining-ca...
- astrodust 9y agoUsing a lot of memory complicates any ASIC design but it doesn't eliminate the possibility of such a thing being made. If someone really knows their hardware engineering they could interface with GDDR5 memory on a custom board and mine as fast or faster than a GPU. It's just a matter of how much money it will take to develop such a chip. I'd guess at least $2-5 million given how you'd need to fabricate it at 14nm or better to get sufficient performance, and that process can be a serious headache for smaller firms.
- yuhong 9y agoThinking about it, I wonder how much QDR SRAM bandwidth compare with GDDR5. This would be useful for Monero for example. Nobody is going to care about spending a few hundred for FPGAs with large amount of memory if a 5x-10x boost over GPUs is possible, but...
- astrodust 9y agoThere's a price trap here. The good FPGAs still cost $10K or more each and if you're intending to ship that hardware, which is how the Bitcoin and Litecoin ASIC platforms bootstrapped themselves, you're going to be in trouble if your FPGA solution can't beat the equivalent spend on GPUs. Bitcoin lends itself to FPGA acceleration extremely well, SHA256 is trivial to implement in an absurdly parallel way. Scrypt is a bit more messy but not impossibly hard. The Ethereum one is a beast by design, so it'll be a true challenge for any implementor. Ten R580 cards can really crank out hashes for Ethereum. For a GPU to keep up it's going to have serious memory bandwidth issues as that's one of the limiting factors in this brand of mining. What you might see is someone getting a license to make "OEM video cards" and then produce a line of mining-optimized cards. Given the constrained supply across the board on any AMD GPU this would be an easy win for a company like MSI or Gigabyte that's already making GPUs. Strip off the useless ports, tune the memory bandwidth, and make them work over USB-C instead of PCI-e so you can really pack a system full of these things. Making an external GPU that comes in a nice housing with USB-C interconnect would also sell well in the machine learning market where you wouldn't have to worry so much about shoe-horning GPUs in your case. You could just stuff them in a rack.
- thaumaturgy 9y agoFor those thinking, "now's a great time to join the party!", the price surge happened from about March to about May of this year, with BTC more than doubling in USD price. However, it's been completely flat for over a month now -- longer than any other point in recent history -- and there are currently some big questions about the future of BTC that are being addressed next month and may result in a loss of value for some number of people, depending on how things shake out. Smart money right now isn't in BTC, unless you think you can predict what's going to happen in the next six months and you're willing to keep it for a longer period. And, even then, you'd be better off selling it back to USD and re-buying when it likely falls back down to sub-$2000 in a month.
- delegate 9y ago> Smart money right now isn't in BTC, Where is it then ? I too would like to join the 'rich fast' bandwagon !
- tertius 9y agoShorting SBUX since June 4th? Where have you been?
- brainopener 9y agoLean hogs.
- tertius 9y ago> Smart money right now isn't in BTC Ah, so smart money is predicting what will happen with BTC in the next six months and acting accordingly. > unless you think you can predict what's going to happen in the next six months Ah, you can't predict what will happen in the next six months.
- nthcolumn 9y agoI am not a financial expert. Some people have maxed their plastic out on bitcoin. I think that someone somewhere sometime will be left with the bill if there is no actual resource behind the currency - it is just an IOU after all. The UK PM talks about terrorists having no place to hide their money today, it dives $200. Too much feels like an elaborate scam - a silkroad clone goes completely dark or exchanges 'getting hacked'. I know I know: if I'd kept my .bitcoin I'd be even richer now...
- projectramo 9y agoThis headline is simply not accurate. It should say: hobby miners barely break even over a year after the rise in bitcoin prices if they ignore the cost of power. However, the difficulty of mining has gone up so much that they are unlikely to recoup the power costs going forward.
- tabeth 9y agoI sure hope anyone who's mining Bitcoin isn't also complaining about climate change. Also, electricity costs and various other externalities (depreciation of the machine and inevitable waste handling) are never accounted for.
- dogma1138 9y agoBitcoin is down like £450 since last month the guy is a little bit late to the party.
- yuhong 9y agoWhat is fun is the Litecoin one, and the fact there are ASICs with crappy power efficiency like the GAWMiners Fury and any other miners using the Zeusminers chips.