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Someone please do the math on the energy lost in GPUs calculating hashes compared to the dollar value of the bitcoin rewards. The average miner might be better
by ivankirigin 15y ago
Someone please do the math on the energy lost in GPUs calculating hashes compared to the dollar value of the bitcoin rewards. The average miner might be better off just powering down their machines.
- siegecraft 15y agoThis math has already been done (see https://en.bitcoin.it/wiki/Power_Calc https://en.bitcoin.it/wiki/Power_Calc). Right now it's (theoretically) profitable to generate bitcoins; that would change if the exchange rate goes down.
- Unseelie 15y agoThat's making the assumption that the exchange rate goes down. If, (big if) the currency finds demand..the exchange rate goes up. I saw it pointed out somewhere that bitcoins are meant to be rare, and that once the final bitcoin is generated, as there's meant to be a set ammount, there will be many orders of magnitudes less of them than dollars, euros, or the etc. So, even if the cost right now is high, having a hash of them could become worth a great deal. That is of course speculative, but when there's going to be 1 bitcoin for every 600,000 of today's dollars...assuming the sum of bitcoins becomes worth a thousandth of that of dollars, each bitcoin will be worth 600 dollars...run a mining op for one coin a day for a year(365 coins), hold onto it for a while, average the price down to 300 dollars a coin...sell for a hundred grand... So running a bitcoin mining opp, or even buying the coins at current market value, is a feasible long term high risk investment. I wouldn't suggest putting all your eggs in that basket, but I would suggest adding the purchase of the occasional bitcoin (or the cost of mining) to your list of high risk investments.
- akkartik 15y agoFor the value of bitcoins to go up the world at large has to have a reason to leave conventional currencies and jump to it. When bitcoins become rare why won't someone else start a new bitcoin2? I think there's an asymptotic max price that can't be crossed.
- Unseelie 15y agostarting a new bitcoin is the best way to deflate bitcoins that I've encountered so far. What do you suspect the max price would be?
- akkartik 15y agoI don't know. The breakeven point would be where others start to jump in to take advantage of the high prices.
- hugh3 15y agoI've already started a bitcoin2 (actually it's called Bitcoin Prime). The rules are as follows: 1. Every string of bits that is a bitcoin is also a Bitcoin Prime. 2. Currently I own all extant Bitcoins Prime, but I'm willing to sell them. Right now I am willing to sell them at a 50% discount relative to Bitcoins, so you can get twice the Bitcoins Prime for your US dollars. You'd be an idiot to buy Bitcoin when you can buy Bitcoin Prime at half the price, right?
- sethg 15y agoNever mind the energy; think of the capital expenditure. If I have US$1,000 lying around, I could either put it in a mutual fund, getting a certain number of dollars per month (with which I could buy bitcoins), or I could buy a kick-ass GPU card and become a miner, generating a certain number of bitcoins per month (which I could then sell in exchange for dollars). At current interest rates, which is a better investment?
- weavejester 15y agoCurrently, mining is considerably more profitable. With $1000 you could probably put together a server that would generate 700 MHash/s, which currently equates to about $1000 in profit per month. You'd repay your initial investment quite quickly. However, a mutual fund represents a consistent and safe income. I very much doubt that bitcoin mining will remain as profitable as it is now for very long.
- Unseelie 15y agoPaypal's money market yeild is currently .06% per week. At that rate, with $1000, you make .6 dollars a week, and buy maybe a bitcoin each month and a half...the discussion here is about earning a bitcoin a day mining, so I'm assuming you're down under a third of the mining return. Assuming the cost of the electricitiy is 1.26 cents per kwh, and your machine is running at around 800 wats, constantly, that's 720 hours and 576 kwh, seven dollars a month...so the cost of running doesn't seem to be that high either. Edited for bad math. May continue to do so. Please point out errors.
- weavejester 15y agoActually, even with a $200 ATI graphics card, you can earn about $500 revenue per month for about $100 in electrical costs. That said, I suspect such a high level of profit won't last for long. It remains to be seen whether the current high value of bitcoins will last, and the more miners there are, the more profit has to be shared.
- Unseelie 15y agohow'd you arive at $100 in electrical costs? that's rather higher than I calculated, and actually more than my home's entire monthly bill, with four computers being run sporadically, plus the central air nearly constantly, the washer, drier, water heater, refridgerator, tv, and other incedentals...
- weavejester 15y agoI was assuming a 700W power supply running 24 hours for 30 days, paying $0.20 per kwh. My cost estimates are admittedly a little on the high side, as I didn't want to be accused of overestimating the profit.
- Unseelie 15y agoAh. My power bill is somewhere around 1.5 cents per kwh..
- Tichy 15y agoWhere do you live? You should set up a co-location data center for BitCoin Mining rigs. I pay 0.23€ per kwh...
- wmf 15y agoA PC with one GPU is more like 300W (of course people buy ridiculously overpowered power supplies, but the rating isn't the same as the consumption).
- 15y ago
- kinghajj 15y agoI think some of us are counting on the price to rise before we see significant return on investment. And for some others, electricity may be free, or at least not paid by themselves. As for estimating the whole network's energy, here's a gross, probably exaggerated way to measure it. My 5870 gets 370 Mhash/s at 188 W. The current network rate is 2000 Ghash/s. 2000 / 0.37 * 188 = ~1 megawatt. Seems reasonable, especially since it's distributed worldwide.
- xbryanx 15y agoI know I sound like a nutjob, but consider the carbon! A new currency built upon intensive coal hungry computing hardly seems like a long or even mid-term sustainable idea.
- webXL 15y agoWhat about all the CO2 increases caused by cutting down trees in order to store value on paper, and physically mining gold?
- nowarninglabel 15y agoIt's a valid concern, but it would be better to weight it against the current carbon costs of existing currencies.
- IbJacked 15y agoHowever, the energy costs are upfront and non-recurring. The number of bit coins produced every 4 years is halved, capping out at about 21,000,000.
- wmf 15y agoNope, after 21M BTC are generated the miners keep going; new blocks are still needed to record transactions.
- Tichy 15y agoWith the exchange rate atm being >7$/BTC, at the moment it is still profitable. As soon as it becomes unprofitable, I'll power down the machine. My miner costs me ~65EUR/month in electricity. On the other hand, lots of other people will probably power down their miners, too, so that mining will become easier again. Then it could become feasible to mine again... I am actually sorry about the waste of energy, but I decided that for once I'd join in the fun. I have never owned a car, so I hope that makes up for the waste to some extent.
- ivankirigin 15y agoa proper analysis might take into account the desirability of converting to estimate the number of miners which directly affects the cost of conversion. My guess is that as the number of bitcoins created starts to get rate limited, it will be right right below profitability over the long term because many miners can steal energy (e.g. a personal box at work) to warp the market.
- Tichy 15y agoI must admit I don't understand your first sentence. But it is true that many people can steal energy (student halls seem to be popular) and thus have an advantage in mining. When I started my analysis was essentially "if I am lucky I can get back my investment and get a new gaming PC that pays for itself".
- ivankirigin 15y agoMy first sentence just meant that you might model M, the number of miners, as a function of the profitability, P. P is a function of M. There is a constant for M that is independent of P, M_power_leech.
- Tichy 15y agoTrue, but that only means that my "people will quit and it will become profitable again" scenario might not happen. I think every miner assumes that the days of profitability are limited.