4 ms·

This isn't really news. I did the math a month ago and came to the same conclusion. That I could probably make a little money if I don't mind heating up my ho

This isn't really news. I did the math a month ago and came to the same conclusion. That I could probably make a little money if I don't mind heating up my house (costing more in AC costs) and dealing with the noise of the computers running all the time. The projected profits, at the prices that day, were pretty sad. A week later I learned that the better the machines and programs get at producing bitcoins, the harder it is to actually earn one, so the machine works harder for the same output. (The whole market is in on this, not just 1 machine, so it's possible to be ahead of the pack... But they -will- catch on eventually.) At that point I realized that even if I built a perfect rig that paid for itself every 3 months, I would have to continuously upgrade it to keep up with the market. It's simply not worth it.

MichaelApproved 15y ago
Why buy a new machine after 3 months? Once it makes back it's cost, wouldn't you still be able to earn money from it so long as it can cover the cost of running and storing it?
- inportb 15y ago
  No, because of the increased difficulty. However, nobody said anything about buying a new machine. It should be sufficient to upgrade the graphics processor...
  - MichaelApproved 15y ago
    I think there was an edit in the parent from something like "new machine" to "upgrade" while I was writing the reply. Of course, I could've misread it too.
- clawrencewenham 15y ago
  Because as everyone else joins and upgrades, the difficulty of mining gets increased to match, and after a few months that machine is no longer efficient enough to pay for its electricity and cooling.
- podperson 15y ago
  Only if more performance/watt machines haven't driven the output of your machines below the cost of electricity.
  - MichaelApproved 15y ago
    Wow. I know very little about mining and had no idea that the market moved that fast.
    - wccrawford 15y ago
      Yeah, that's the bit I learned a week after doing the calculations. When people first started, they were using CPUs. When GPU usage became available, CPU-miners became so horribly inefficient that electricity cost alone killed them. Now, granted, I can't imagine anything being that much better than GPUs, but new GPUs are usually much more efficient than old ones, and they come out all the time. It could quickly became an arms race just to break even. On top of that, apparently there's also a built-in cycle that makes it harder even if the machines don't change. The linked article touches on that briefly as part of his decision.
      - ahi 15y ago
        FPGAs and ASICs are in use by a few people/companies. They have the opposite cost structure of GPUs. The two main measures are MegaHash per $ and MegaHash per Watt, roughly analogous to fixed expenses and operating expenses though the MH/Watt also influences investment in power and cooling infrastructure. GPUs have a high MH/$, but a rather poor MH/W. I own 2 Radeon 5830s, $110 each, that still spit out about $5 a day at current prices making for a rather impressive rate of return in spite of high power requirements. From what I have read, FPGAs require about an order of magnitude higher capital investment with the benefit of a drastically reduced power consumption. Last I checked about 6 weeks ago, a decent GPU rig could pay for itself in a month or two, while an FPGA setup could pay for itself in about a year. The tradeoff is that the GPU rig's payout may dip below power costs before it pays itself out (likely the case for any rigs purchased in the past month) essentially betting on the short term difficulty increases, while FPGAs are betting on the long term health of the bitcoin system itself. FWIW, the newer ATI GPUs aren't as good for mining as the older 5800 series. I was a PoliSci/CompSci/Econ mega-nerd in Uni, so Bitcoin is my fantasy come true.
Tichy 15y ago
Those BitCoin miners could also be good gaming PCs. Once I take mine out of action, it will simply be a gaming PC that paid for itself. I actually bought a gaming PC off ebay for mining - of course if you just bought a crappy PC with a fast graphics card it might be different.
JonnieCache 15y ago
>...if I don't mind heating up my house (costing more in AC costs) and dealing with the noise of the computers running all the time. Have there ever been any cases of miners being raided by the police? Because these sound like similar problems faced by another profitable cottage industry that crosses my mind...
- joejohnson 15y ago
  Yeah, at least one: http://esspe.net/bitcoins-and-weed http://esspe.net/bitcoins-and-weed
  - JonnieCache 15y ago
    He mentions the power usage, people do get reported over that. However the police also check for unusual heat signatures coming out of buildings at night, that could also have been what happened. Interestingly, in some jurisdictions (notably canada) looking through someone's roof with an IR camera constitues an invasion of privacy, and requires a warrant. Looking forward to the future when Bitcoin gets banned, and we see documentaries with police officers breaking down makeshift barricades to gain entry to innocuous looking barns way out in the countryside, pulling back layers of plastic sheeting to find a state of the art datacenter inside, with racks of clustered GPUs, and one very dishevelled looking vietnamese nerd sleeping on a bare mattress.
    - omouse 15y ago
      However the police also check for unusual heat signatures coming out of buildings at night, that could also have been what happened. Uh, wtf, since when? They're allowed to do this without a warrant? They just randomly drive along the streets and check heat signatures? Looking forward to the future when Bitcoin gets banned, and we see documentaries with police officers breaking down makeshift barricades to gain entry to innocuous looking barns way out in the countryside, pulling back layers of plastic sheeting to find a state of the art datacenter inside, with racks of clustered GPUs, and one very dishevelled looking vietnamese nerd sleeping on a bare mattress. That'll happen soon and it won't be just for BitCoin, it'll be for any p2p network or any encrypted network since the governments of the world are all going censorship crazy at the moment.

MichaelApproved 15y ago

Why buy a new machine after 3 months? Once it makes back it's cost, wouldn't you still be able to earn money from it so long as it can cover the cost of running and storing it?

inportb 15y ago
No, because of the increased difficulty. However, nobody said anything about buying a new machine. It should be sufficient to upgrade the graphics processor...
- MichaelApproved 15y ago
  I think there was an edit in the parent from something like "new machine" to "upgrade" while I was writing the reply. Of course, I could've misread it too.
clawrencewenham 15y ago
Because as everyone else joins and upgrades, the difficulty of mining gets increased to match, and after a few months that machine is no longer efficient enough to pay for its electricity and cooling.
podperson 15y ago
Only if more performance/watt machines haven't driven the output of your machines below the cost of electricity.
- MichaelApproved 15y ago
  Wow. I know very little about mining and had no idea that the market moved that fast.
  - wccrawford 15y ago
    Yeah, that's the bit I learned a week after doing the calculations. When people first started, they were using CPUs. When GPU usage became available, CPU-miners became so horribly inefficient that electricity cost alone killed them. Now, granted, I can't imagine anything being that much better than GPUs, but new GPUs are usually much more efficient than old ones, and they come out all the time. It could quickly became an arms race just to break even. On top of that, apparently there's also a built-in cycle that makes it harder even if the machines don't change. The linked article touches on that briefly as part of his decision.
    - ahi 15y ago
      FPGAs and ASICs are in use by a few people/companies. They have the opposite cost structure of GPUs. The two main measures are MegaHash per $ and MegaHash per Watt, roughly analogous to fixed expenses and operating expenses though the MH/Watt also influences investment in power and cooling infrastructure. GPUs have a high MH/$, but a rather poor MH/W. I own 2 Radeon 5830s, $110 each, that still spit out about $5 a day at current prices making for a rather impressive rate of return in spite of high power requirements. From what I have read, FPGAs require about an order of magnitude higher capital investment with the benefit of a drastically reduced power consumption. Last I checked about 6 weeks ago, a decent GPU rig could pay for itself in a month or two, while an FPGA setup could pay for itself in about a year. The tradeoff is that the GPU rig's payout may dip below power costs before it pays itself out (likely the case for any rigs purchased in the past month) essentially betting on the short term difficulty increases, while FPGAs are betting on the long term health of the bitcoin system itself. FWIW, the newer ATI GPUs aren't as good for mining as the older 5800 series. I was a PoliSci/CompSci/Econ mega-nerd in Uni, so Bitcoin is my fantasy come true.

Tichy 15y ago

Those BitCoin miners could also be good gaming PCs. Once I take mine out of action, it will simply be a gaming PC that paid for itself. I actually bought a gaming PC off ebay for mining - of course if you just bought a crappy PC with a fast graphics card it might be different.

JonnieCache 15y ago

>...if I don't mind heating up my house (costing more in AC costs) and dealing with the noise of the computers running all the time. Have there ever been any cases of miners being raided by the police? Because these sound like similar problems faced by another profitable cottage industry that crosses my mind...

joejohnson 15y ago
Yeah, at least one: http://esspe.net/bitcoins-and-weed http://esspe.net/bitcoins-and-weed
- JonnieCache 15y ago
  He mentions the power usage, people do get reported over that. However the police also check for unusual heat signatures coming out of buildings at night, that could also have been what happened. Interestingly, in some jurisdictions (notably canada) looking through someone's roof with an IR camera constitues an invasion of privacy, and requires a warrant. Looking forward to the future when Bitcoin gets banned, and we see documentaries with police officers breaking down makeshift barricades to gain entry to innocuous looking barns way out in the countryside, pulling back layers of plastic sheeting to find a state of the art datacenter inside, with racks of clustered GPUs, and one very dishevelled looking vietnamese nerd sleeping on a bare mattress.
  - omouse 15y ago
    However the police also check for unusual heat signatures coming out of buildings at night, that could also have been what happened. Uh, wtf, since when? They're allowed to do this without a warrant? They just randomly drive along the streets and check heat signatures? Looking forward to the future when Bitcoin gets banned, and we see documentaries with police officers breaking down makeshift barricades to gain entry to innocuous looking barns way out in the countryside, pulling back layers of plastic sheeting to find a state of the art datacenter inside, with racks of clustered GPUs, and one very dishevelled looking vietnamese nerd sleeping on a bare mattress. That'll happen soon and it won't be just for BitCoin, it'll be for any p2p network or any encrypted network since the governments of the world are all going censorship crazy at the moment.