4 ms·

While having the cards is tablestakes, and newer cards can do more for less, in the end--even for Ethereum--you really still are spending more on electricity th

by saurik 5y ago

While having the cards is tablestakes, and newer cards can do more for less, in the end--even for Ethereum--you really still are spending more on electricity than hardware, and so you can have all the cards in the world and still not be able to mine crypto effectively. Most mining is thereby done in other places in the world where the externalities on power generation and use (clean or dirty, both) are less well tracked, with the occasional place in the US--such as the plants in NY that are being booted back up just to mine crypto--where people are actively trying to make it illegal. I would imagine a lot of the mining done in the US ends up being either to "launder" (not quite the right term) money (buying lots of power and converting it to untraceable crypto for illegal activity... kind of a reverse laundry ;P) or with "stolen" power (as is the case of a college student mining in their dorm room).

willhinsa 5y ago
With today’s ETH prices, electricity costs are a fraction of the revenue from mining. Like, on the order of less than 10%.
- saurik 5y ago
  That's brutal... isn't the hash difficulty supposed to automatically increase to compensate? Is it actually the case that the limiting factor on hash rate right now is how quickly Nvidia is willing to sell GPUs?!
  - willhinsa 5y ago
    Yes, your relative hash power does give you a smaller and smaller piece of the pie all things equal as more hardware mines the blockchain. However, the increase in the USD price of ETH and also the demand for transactions on the ETH blockchain have both gone way up (i.e. the cost for a transaction of a given size, a.k.a. "gas", measured in "gwei"), and the balance of those three factors means mining on the same card is currently much more profitable than it was in the past. Uniswaps and NFT's are large transactions and bid up the price of gas, and have been very popular as of late.
judge2020 5y ago
Ethash is actually more profitable when underclocking and power limiting the card for max efficiency. With cheap electricity around $0.10/kWh this can mean $0.30 a day on $7 in profit. a 3070 with an average 60 Mh/s: https://whattomine.com/coins/151-eth-ethash?hr=60&p=120&fee=0.0&cost=0.1&hcost=0.0&span_br=1h&span_d=24&commit=Calculate https://whattomine.com/coins/151-eth-ethash?hr=60&p=120&fee=...
- saurik 5y ago
  Ok, so now I am dying to understand how this could possibly be the case, as this isn't how the economics are supposed to work... like, according to this calculator, I could make $5 with the old graphics cards in my PC, and I live in California (where I would expect expensive power). Like, the premise is supposed to be that if there is that much profit to be made mining, people will mine, the hash rate will skyrocket, the block production time will get too low, and the hash difficulty will rise until the profit you can make is low enough that you aren't sure if you want to do it anymore. Does the difficultly just not rise fast enough? Or like, is this largely just because the price of Ethereum has gone up "too quickly" in the past month? If so, does this calculator take into account the incentive factor that if people actually do this the difficulty will go up, and so this $7 of profit today might be $0.50 of profit in a month, and maybe you will fail to pay off your hardware investment fast enough? Or is there just something really weird going on in this market that I don't understand (and would love love love to learn about)... maybe it literally is just as simple as "there aren't enough graphics cards to go around, and Nvidia's disinterest in making profit in this way--even temporarily--is the strongest current limit on hashrate"?
  - drexlspivey 5y ago
    ETH price is +500% YTD and it’s not really worth it to buy hardware to mine now because in less than a year it is expected to move to proof of stake (no more mining)
zeckalpha 5y ago
What do you mean untraceable crypto? Isn’t there a distributed ledger of transactions?
- saurik 5y ago
  I mean vs. traceable crypto. When you mine crypto, it essentially poofs out of nothing into your hand: there is nothing to trace it "from", as it were, on the blockchain, as the electricity you paid for it isn't recorded in that ledger; so, if you want to do something illegal with money, and you need to figure out a way to control some funds that no one can work out "is you", mining crypto is a great way to do it: you pay for electricity in fiat and obtain a fundamentally unrelated pile of crypto.

by saurik 5y ago

willhinsa 5y ago

With today’s ETH prices, electricity costs are a fraction of the revenue from mining. Like, on the order of less than 10%.

saurik 5y ago
That's brutal... isn't the hash difficulty supposed to automatically increase to compensate? Is it actually the case that the limiting factor on hash rate right now is how quickly Nvidia is willing to sell GPUs?!
- willhinsa 5y ago
  Yes, your relative hash power does give you a smaller and smaller piece of the pie all things equal as more hardware mines the blockchain. However, the increase in the USD price of ETH and also the demand for transactions on the ETH blockchain have both gone way up (i.e. the cost for a transaction of a given size, a.k.a. "gas", measured in "gwei"), and the balance of those three factors means mining on the same card is currently much more profitable than it was in the past. Uniswaps and NFT's are large transactions and bid up the price of gas, and have been very popular as of late.

judge2020 5y ago

Ethash is actually more profitable when underclocking and power limiting the card for max efficiency. With cheap electricity around $0.10/kWh this can mean $0.30 a day on $7 in profit. a 3070 with an average 60 Mh/s: https://whattomine.com/coins/151-eth-ethash?hr=60&p=120&fee=0.0&cost=0.1&hcost=0.0&span_br=1h&span_d=24&commit=Calculate https://whattomine.com/coins/151-eth-ethash?hr=60&p=120&fee=...

saurik 5y ago
Ok, so now I am dying to understand how this could possibly be the case, as this isn't how the economics are supposed to work... like, according to this calculator, I could make $5 with the old graphics cards in my PC, and I live in California (where I would expect expensive power). Like, the premise is supposed to be that if there is that much profit to be made mining, people will mine, the hash rate will skyrocket, the block production time will get too low, and the hash difficulty will rise until the profit you can make is low enough that you aren't sure if you want to do it anymore. Does the difficultly just not rise fast enough? Or like, is this largely just because the price of Ethereum has gone up "too quickly" in the past month? If so, does this calculator take into account the incentive factor that if people actually do this the difficulty will go up, and so this $7 of profit today might be $0.50 of profit in a month, and maybe you will fail to pay off your hardware investment fast enough? Or is there just something really weird going on in this market that I don't understand (and would love love love to learn about)... maybe it literally is just as simple as "there aren't enough graphics cards to go around, and Nvidia's disinterest in making profit in this way--even temporarily--is the strongest current limit on hashrate"?
- drexlspivey 5y ago
  ETH price is +500% YTD and it’s not really worth it to buy hardware to mine now because in less than a year it is expected to move to proof of stake (no more mining)

zeckalpha 5y ago

What do you mean untraceable crypto? Isn’t there a distributed ledger of transactions?

saurik 5y ago
I mean vs. traceable crypto. When you mine crypto, it essentially poofs out of nothing into your hand: there is nothing to trace it "from", as it were, on the blockchain, as the electricity you paid for it isn't recorded in that ledger; so, if you want to do something illegal with money, and you need to figure out a way to control some funds that no one can work out "is you", mining crypto is a great way to do it: you pay for electricity in fiat and obtain a fundamentally unrelated pile of crypto.