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Mining bitcoin is thoroughly impractical. It would cost you significantly more in electricity than you would make in bitcoin. The only effective way to do it

Mining bitcoin is thoroughly impractical. It would cost you significantly more in electricity than you would make in bitcoin. The only effective way to do it is with specialized hardware built specifically for mining bitcoins. It's not too late to buy bitcoins, though: you don't need to buy a whole one. For example, if you think bitcoin will double in price over the next month, you can easily buy 0.1 bitcoins for about $100 and sell it next month for $200. One of the benefits of bitcoin is that it's highly divisible- the idea of "1" bitcoin doesn't really matter for most purposes. If Bitcoin becomes commonly used as an actual currency, people will almost never deal in whole bitcoins (any more than they would deal with $10k bills if they existed). You'd buy a loaf of bread with 0.0001 bitcoins, for example. So, if you think the trend/fad/craze will continue, you might as well buy fractions of a bitcoin. I can't speak to the alternate crypto currencies, though.

coin 13y ago
> It would cost you significantly more in electricity than you would make in bitcoin. This is outdated advice from the GPU mining days. ASIC miners use very little electricity compared the BTC that they generate.
- xyzzy123 13y ago
  Technically, you're right; the electricity used over an ASIC miner's lifetime is very little. The OP has the right idea though, even though the reasoning is wrong. It actually comes down to whether your mining unit can cover its capital investment. If it weren't for the huge price increases, all the people who bought ASIC miners would be underwater right now. I have a 60GH/s BFL miner. It uses about 350W or so. The fans are LOUD. When I get home the room it's been running in is noticeably warmer. They don't generate as much BTC as one might think - just 0.04 / day at current difficulty and this is decreasing at a rapid clip (1 month ago or so it was 0.11 / day). As an aside, I've always wondered if one day all heating will be computational waste heat. You could almost give away ASICs (whether for mining or other purposes) to people in cold countries and subsidise their electricity when they run their heater...
  - brian_cloutier 13y ago
    > You could almost give away ASICs (whether for mining or other purposes) to people in cold countries and subsidise their electricity when they run their heater... In San Francisco this is already a reality: http://www.icebreaker-sf.com/3/post/2013/11/heat-the-icebreaker-with-your-mining-rig-cheapest-electricity-on-earth.html http://www.icebreaker-sf.com/3/post/2013/11/heat-the-icebrea...
piokoch 13y ago
The fact that bitcoin is so divisible might be its true weakness in terms of adoption (given huge value of a single Bitcoin). Imagine prices in shop given as 0.000132 BTC, 0.000123 BTC, 0.0000132 BTC or even worst 0.0009999, 0.000999, 0.009999 - looks similar and it is easy to be mislead and pay for something much more then expected. People would need to get use to count zeros after decimal point. This hardly matters with any real currency.
- grey-area 13y ago
  That's really not a big deal. If it was truly popular and highly priced relative to everyday purchases, we'd just invent names for fractions thereof, and use those for pricing, as we do in reverse for currencies like dollars or pounds. They already have satoshis etc. Far more important limitations: Built in deflation - that it is seen as a one-way bet with ever-increasing value and an ever more limited supply would cause problems if used as a currency (though not obviously as a store of value). The problem for it as a store of value is that the value is entirely predicated on it being a successful currency. Volatility - if prices change rapidly, that would make use in retail almost impossible, and as a store of value dangerous. Many of the places which say they take Bitcoin right now simply move the money immediately to another currency to avoid this issue - that's not going to work if it is actually used as a currency and to store value long-term. Imagine it replacing the USD for example and remaining volatile... Time to process transactions - takings minutes to verify a transaction is not going to work -it'd need to be on the order of seconds, and for a digital currency it really should be as fast as the network. Lack of regulation - again retailers/consumers should be nervous if their financial institutions have no regulations or guarantees that the money they say they hold actually exists at all. Some exchanges have reported a massive theft and walked away with no liability, others impose arbitrary limits on withdrawals etc - this really is wild-west finance and in a crash or bubble you can expect extreme fraud to go on undetected because there are no independent auditors, regulations or laws which govern these activities. Lack of ties to identity - without verified accounts it's far too easy to commit fraud or theft - very like paper money which everyone is moving away from. Lack of reversibility - it doesn't let you roll back transactions, though one could work around this by keeping a ledger and rolling the ledger positions back by transferring coins back and forth. If you're going to do that though and trust the bank/exchange to regulate transactions, why bother with the cryptocurrency bit at all? Lack of transparency in the management process - who decides on the rules of the game here? If the official clients suddenly change rules in concert - existing bitcoin holders would have to just go along with this if the majority voted with it - when large amounts of money are involved, this sort of thing becomes very important. e.g. we hit the existing 21m limit, and those controlling the software decide to up the limit to 30m - suddenly lots of assumptions about value would be questioned. I'd be very nervous about the lack of regulated control. Lack of backing by a government, corporation or trading bloc - when the market attacks government currencies, governments are able to expend extreme resources to mitigate outright panic and collapse. When the market sharks get interested in Bitcoin and attack it in the same way as they attack say the Euro, there will be no such backup, just a freely floating rate which is open to manipulation and depends entirely on public confidence. I do think it has some interesting properties and is a useful experiment, but have extreme reservations about this being the actual digital currency which makes it into use as a global exchange mechanism.
netrus 13y ago
Just recently an article at Spiegel Online (main German news site) claimed something along the line of: Bitcoin now passed the valuation of 1.000 USD. For comparision, the price of gold is at 1.300 USD at the moment. As if something magical would happen if Bitcoin would pass Gold. Strange stuff ... Too many people dont realize that while it might be hard to invest 50$ in Apple, investing 50$ in Bitcoin is always possible - no matter the current price.

coin 13y ago

> It would cost you significantly more in electricity than you would make in bitcoin. This is outdated advice from the GPU mining days. ASIC miners use very little electricity compared the BTC that they generate.

xyzzy123 13y ago
Technically, you're right; the electricity used over an ASIC miner's lifetime is very little. The OP has the right idea though, even though the reasoning is wrong. It actually comes down to whether your mining unit can cover its capital investment. If it weren't for the huge price increases, all the people who bought ASIC miners would be underwater right now. I have a 60GH/s BFL miner. It uses about 350W or so. The fans are LOUD. When I get home the room it's been running in is noticeably warmer. They don't generate as much BTC as one might think - just 0.04 / day at current difficulty and this is decreasing at a rapid clip (1 month ago or so it was 0.11 / day). As an aside, I've always wondered if one day all heating will be computational waste heat. You could almost give away ASICs (whether for mining or other purposes) to people in cold countries and subsidise their electricity when they run their heater...
- brian_cloutier 13y ago
  > You could almost give away ASICs (whether for mining or other purposes) to people in cold countries and subsidise their electricity when they run their heater... In San Francisco this is already a reality: http://www.icebreaker-sf.com/3/post/2013/11/heat-the-icebreaker-with-your-mining-rig-cheapest-electricity-on-earth.html http://www.icebreaker-sf.com/3/post/2013/11/heat-the-icebrea...

piokoch 13y ago

The fact that bitcoin is so divisible might be its true weakness in terms of adoption (given huge value of a single Bitcoin). Imagine prices in shop given as 0.000132 BTC, 0.000123 BTC, 0.0000132 BTC or even worst 0.0009999, 0.000999, 0.009999 - looks similar and it is easy to be mislead and pay for something much more then expected. People would need to get use to count zeros after decimal point. This hardly matters with any real currency.

grey-area 13y ago
That's really not a big deal. If it was truly popular and highly priced relative to everyday purchases, we'd just invent names for fractions thereof, and use those for pricing, as we do in reverse for currencies like dollars or pounds. They already have satoshis etc. Far more important limitations: Built in deflation - that it is seen as a one-way bet with ever-increasing value and an ever more limited supply would cause problems if used as a currency (though not obviously as a store of value). The problem for it as a store of value is that the value is entirely predicated on it being a successful currency. Volatility - if prices change rapidly, that would make use in retail almost impossible, and as a store of value dangerous. Many of the places which say they take Bitcoin right now simply move the money immediately to another currency to avoid this issue - that's not going to work if it is actually used as a currency and to store value long-term. Imagine it replacing the USD for example and remaining volatile... Time to process transactions - takings minutes to verify a transaction is not going to work -it'd need to be on the order of seconds, and for a digital currency it really should be as fast as the network. Lack of regulation - again retailers/consumers should be nervous if their financial institutions have no regulations or guarantees that the money they say they hold actually exists at all. Some exchanges have reported a massive theft and walked away with no liability, others impose arbitrary limits on withdrawals etc - this really is wild-west finance and in a crash or bubble you can expect extreme fraud to go on undetected because there are no independent auditors, regulations or laws which govern these activities. Lack of ties to identity - without verified accounts it's far too easy to commit fraud or theft - very like paper money which everyone is moving away from. Lack of reversibility - it doesn't let you roll back transactions, though one could work around this by keeping a ledger and rolling the ledger positions back by transferring coins back and forth. If you're going to do that though and trust the bank/exchange to regulate transactions, why bother with the cryptocurrency bit at all? Lack of transparency in the management process - who decides on the rules of the game here? If the official clients suddenly change rules in concert - existing bitcoin holders would have to just go along with this if the majority voted with it - when large amounts of money are involved, this sort of thing becomes very important. e.g. we hit the existing 21m limit, and those controlling the software decide to up the limit to 30m - suddenly lots of assumptions about value would be questioned. I'd be very nervous about the lack of regulated control. Lack of backing by a government, corporation or trading bloc - when the market attacks government currencies, governments are able to expend extreme resources to mitigate outright panic and collapse. When the market sharks get interested in Bitcoin and attack it in the same way as they attack say the Euro, there will be no such backup, just a freely floating rate which is open to manipulation and depends entirely on public confidence. I do think it has some interesting properties and is a useful experiment, but have extreme reservations about this being the actual digital currency which makes it into use as a global exchange mechanism.

netrus 13y ago

Just recently an article at Spiegel Online (main German news site) claimed something along the line of: Bitcoin now passed the valuation of 1.000 USD. For comparision, the price of gold is at 1.300 USD at the moment. As if something magical would happen if Bitcoin would pass Gold. Strange stuff ... Too many people dont realize that while it might be hard to invest 50$ in Apple, investing 50$ in Bitcoin is always possible - no matter the current price.