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Why isn't everyone just quitting their day jobs and becoming Bitcoin miners? It's like the modern day Gold Rush!

by gailees 13y ago

Kinnard 13y ago
The West is reckless.
erikpukinskis 13y ago
Because difficulty increases to the point where the folks with the cheapest electricity are breaking even. And the cheapest electricity in the world is free (dorm rooms, cubicles, etc). The only money to be made in Bitcoin mining is in making fairly strategic investments during the leading edge of advancements in efficiency, or changes in miners' understanding of the economics.
- Kinnard 13y ago
  It's getting more complicated than that. Expect financial deepening to occur when it comes to mining. http://jpkoning.blogspot.com/2013/02/financial-deepening-and-currency.html http://jpkoning.blogspot.com/2013/02/financial-deepening-and... I would also keep in mind that lots of people are thinking about harnessing the bitcoin network for a plethora of applications. http://qz.com/84056/the-bitcoin-network-is-now-more-powerful-than-the-top-500-supercomputers-combined/ http://qz.com/84056/the-bitcoin-network-is-now-more-powerful...
  - waterlesscloud 13y ago
    One notable point is that one mining company, Asicminer, has a bitcoin-denominated stock that dramatically increased in value over the last several months. It IPOed at 0.1 btc per share, now trading at about 2.5 btc. Along with the increase in the value of btc relative to the US dollar, Asicminer now has a market cap (on paper) of about $125 million, from an IPO that raised about $200k. They're based in China, Shenzhen I believe, and have been making the most of their self-designed asics. They currently represent about 18% of the entire bitcoin network, as measured by hashrate. http://www.asicminercharts.com/live/ http://www.asicminercharts.com/live/
    - jebeng 13y ago
      Yes, quite the success story. Only possible because of the ineptitude of other market participants utterly failing in deploying ASICs.
munger 13y ago
Because there is one huge problem - the power usage of the CPUs / GPUs / ASICs. If you buy a "mining rig", probably an ASIC costing $1200 - $6000 (you can spend as much as you want scaling up and across) up front and it consumes something like 800 watts of power 24/7, you have the up-front cost of hardware plus the power bill (800W continuous is 584kWh per 30 days which depending on your area might be like $62 per month per 800W rig). You may never recover those costs, especially if newer more powerful ASIC rigs are release each year since more overall network computing power diminishes your existing rig's efficiency. Also - hardware breaks down under maxed out continuous usage, so there's that too.

Why isn't everyone just quitting their day jobs and becoming Bitcoin miners? It's like the modern day Gold Rush!

by gailees 13y ago

Why isn't everyone just quitting their day jobs and becoming Bitcoin miners? It's like the modern day Gold Rush!

Kinnard 13y ago

The West is reckless.

erikpukinskis 13y ago

Because difficulty increases to the point where the folks with the cheapest electricity are breaking even. And the cheapest electricity in the world is free (dorm rooms, cubicles, etc). The only money to be made in Bitcoin mining is in making fairly strategic investments during the leading edge of advancements in efficiency, or changes in miners' understanding of the economics.

Kinnard 13y ago
It's getting more complicated than that. Expect financial deepening to occur when it comes to mining. http://jpkoning.blogspot.com/2013/02/financial-deepening-and-currency.html http://jpkoning.blogspot.com/2013/02/financial-deepening-and... I would also keep in mind that lots of people are thinking about harnessing the bitcoin network for a plethora of applications. http://qz.com/84056/the-bitcoin-network-is-now-more-powerful-than-the-top-500-supercomputers-combined/ http://qz.com/84056/the-bitcoin-network-is-now-more-powerful...
- waterlesscloud 13y ago
  One notable point is that one mining company, Asicminer, has a bitcoin-denominated stock that dramatically increased in value over the last several months. It IPOed at 0.1 btc per share, now trading at about 2.5 btc. Along with the increase in the value of btc relative to the US dollar, Asicminer now has a market cap (on paper) of about $125 million, from an IPO that raised about $200k. They're based in China, Shenzhen I believe, and have been making the most of their self-designed asics. They currently represent about 18% of the entire bitcoin network, as measured by hashrate. http://www.asicminercharts.com/live/ http://www.asicminercharts.com/live/
  - jebeng 13y ago
    Yes, quite the success story. Only possible because of the ineptitude of other market participants utterly failing in deploying ASICs.

munger 13y ago

Because there is one huge problem - the power usage of the CPUs / GPUs / ASICs. If you buy a "mining rig", probably an ASIC costing $1200 - $6000 (you can spend as much as you want scaling up and across) up front and it consumes something like 800 watts of power 24/7, you have the up-front cost of hardware plus the power bill (800W continuous is 584kWh per 30 days which depending on your area might be like $62 per month per 800W rig). You may never recover those costs, especially if newer more powerful ASIC rigs are release each year since more overall network computing power diminishes your existing rig's efficiency. Also - hardware breaks down under maxed out continuous usage, so there's that too.