Bit coin mining

[John Connor]

So I was reading about bit coin mining and was thinking about getting into it. I use to be part of distributed computing and was always curious about the hardware and apps used so bit coin mining seems like a great hobby and maybe a way to turn a profit. Now keep in mind I don't pay for electricity. The only thing I will be paying for is a powered USB hub and a ASIC USB card to mine hashes.

My question: Is it worth it? Should I go solo or join a pool? The first USB card I will get will cost $150 and calculate about 2.6 GH/s. (Giga Hashes per second). How about the software? Is it hard to configure and what about the ASIC card. Do I have to program it?

That's all the questions I have for now.

 

[silverpig]

It's pretty easy, but it's at the point where there's not much money in just crunching yourself.

I don't pay for electricity and have it running on my AMD video card. It does okay, but it only makes less than a dollar a day. 20 cents maybe?

I used to run it a few years ago and made a lot more (~$30 worth of bit coins at today's prices) because it was easier to crunch and the price has appreciated.

Some guys have dedicated ASICs boxes, amazon EC2 servers (not profitable anymore), etc.

I'm on OSX and just have guiminer (mining program) and multibit (wallet) installed and it runs fine. I'm in a pool - deepbit. You'll want to go in a pool because pools find solutions and you will get a percentage of the reward. If you go yourself, you very likely won't find any solutions and will spend all that time for nothing.

 

[rsutoratosu]

I looked into it a while back.. i have a few empty pc at work I can use.. but i'm just too lazy to set them up.. if you dont pay for electric, you wont be in the negative from the get go.

What asic are you looking at ?

I looked at these back then https://products.butterflylabs.com/

 

[pm]

There is a mega-thread in the video card forum on this - 5667 posts - with lots of info.
http://forums.anandtech.com/showthread.php?t=2167303

If you want my advice - and I have been mining since early last year - I would spend a bunch of time looking at a comprehensive calculator before you spend any money.
http://mining.thegenesisblock.com/

The difficulty increases are making this an increasingly marginalized game for small players. I had a Jalapeno (from the Butterfly Labs link) and I sold it. I am still mining Litecoins, but if I graphed my profitability per month, it peaked early this year and it's been on a steady decline since June to the point where there's almost no point nowadays. And I have a 6.7kWh solar panel array so electricity is effectively free to me.

It's an attactive idea - effectively printing money at home with a computer. And maybe the price of BTC will go through the roof and make this all work out. But with the last difficulty increase of 33%, it seems like it will be hard for the price to keep up with the increased ASIC hash rate.

 

[Biftheunderstudy]

What's been alluded to already, is that SHA256 mining is not lucrative at all. Maybe with specialized hardware, like ASICs. But you probably won't pay those off before the difficulty rises really high.

My advice is to mine Litecoin or something similar, GPU's are still king in this regime. My rigs make around 2-3$ per day (2x6950's and a 5870).

One step further is to do something like middlecoin, which mines the most lucrative coin and pays out in bitcoin.

 

[John Connor]

What asic are you looking at ?

I think it's called the Red Fury. It's USB based and i think it can process 2.6 GH/s.

 

[John Connor]

If you want my advice - and I have been mining since early last year - I would spend a bunch of time looking at a comprehensive calculator before you spend any money.
http://mining.thegenesisblock.com/

I did try a calculator and found that I would make some 400 dollars a year. Does that sound right? I will be buying a ASIC USB card that can process 2.6 GH/s and adding more month by month.

 

[John Connor]

What's been alluded to already, is that SHA256 mining is not lucrative at all. Maybe with specialized hardware, like ASICs. But you probably won't pay those off before the difficulty rises really high.

My advice is to mine Litecoin or something similar, GPU's are still king in this regime. My rigs make around 2-3$ per day (2x6950's and a 5870).

One step further is to do something like middlecoin, which mines the most lucrative coin and pays out in bitcoin.

I read ASIC is better than graphic cards. https://en.bitcoin.it/wiki/Mining_hardware_comparison

What app do I use for litecoin, middlecoin?

Edit- Just found out that with ASIC I can't mine litecoin.

ASIC Mining

An application-specific integrated circuit, or ASIC, is a microchip designed and manufactured for a very specific purpose. ASICs designed for Bitcoin mining were first released in 2013 and (at the time of this writing) are in the hands of a very limited number of miners. For the amount of power they consume, they are vastly faster than all previous technologies and already has made GPU mining financially unwise in some countries and setups.

https://en.bitcoin.it/wiki/Mining#Hardware

 

[John Connor]

So I might wait till Feb to buy a ASIC card that can crack 64,000 MH/s and according to this calculator I will earn almost $50 a day. Is this even right? The unit cost about $250 and is 36 watts. But I'm not paying for power.

http://www.bitcoinx.com/profit/

I have another question. Once I download my bitcoin wallet how do I transfer bitcoins to dollars? Can I use Paypal or something? LOL

Okay, I found this. https://coinbase.com/docs/merchant_tools/payouts

Just logged into Paypal and didn't see anything referring to Bitcoin, but I heard they are considering it. If I'm going to mine for Bitcoins I need to find an escrow service to handle my Bitcoins.

Edit- Wish that new ASIC card was out now instead of Feb because the complexity increases and I may not make the $50 bucks a day like I hoped.

 

[pm]

Make sure you factor in difficulty increases.

 

[Biftheunderstudy]

Litecoin uses a different hashing algorithm that is memory intensive, and thus expensive to implement on an FPGA or ASIC.

I use bfgminer/cgminer which can mine either SHA256 or scrypt, you just point it at a pool.

The main problem I see with the ASIC is that it is really hard to actually get one. By the time you get one of those rigs, the difficulty will have gone up by many orders, making your return on investment really bad.

I started mining in February and the difficulty was ~9 million I think. My miners made me about a 100$, now the difficulty is 190 million and climbing exponentially -- that would make it something like 20$ over the same time period.

Litecoin on the other hand was around difficulty 800 when I started a few months ago, now its around 1100.

Anyhow, checkout coinwarz for more info.

 

[PrincessFrosty]

The general consensus seems to be that ASICs have now made mining bitcoins more or less unprofitable for small time players, it was always going to be that the trend of mining coins would very quickly approach unprofitable, if you give a way for people to essentially "print money" then everyone is going to start doing it lowering profit margins.

The early adopters won big it seems but those days are gone, it sucks but it seems to be the truth.

 

[silverpig]

So I might wait till Feb to buy a ASIC card that can crack 64,000 MH/s and according to this calculator I will earn almost $50 a day. Is this even right? The unit cost about $250 and is 36 watts. But I'm not paying for power.

http://www.bitcoinx.com/profit/

I have another question. Once I download my bitcoin wallet how do I transfer bitcoins to dollars? Can I use Paypal or something? LOL

Okay, I found this. https://coinbase.com/docs/merchant_tools/payouts

Just logged into Paypal and didn't see anything referring to Bitcoin, but I heard they are considering it. If I'm going to mine for Bitcoins I need to find an escrow service to handle my Bitcoins.

Edit- Wish that new ASIC card was out now instead of Feb because the complexity increases and I may not make the $50 bucks a day like I hoped.

If you could make $50 a day by spending $250 once, it wouldn't take long for someone with $5000 to start making $1k a day. It also wouldn't take long for a few hundred people to do that, and it also wouldn't take long for the difficulty to ramp up to the point where that wasn't profitable anymore.

Those ASICs usually are backordered and delayed by months, to the point where they aren't profitable by the time you get them.

If you were able to make them, would you sell them for $250?

 

[PrincessFrosty]

If you could make $50 a day by spending $250 once, it wouldn't take long for someone with $5000 to start making $1k a day. It also wouldn't take long for a few hundred people to do that, and it also wouldn't take long for the difficulty to ramp up to the point where that wasn't profitable anymore.

Those ASICs usually are backordered and delayed by months, to the point where they aren't profitable by the time you get them.

If you were able to make them, would you sell them for $250?

Exactly, the only thing that made it profitable to begin with was a blend of obscurity and also risk that the currency might not actually be worth anything, the guys early on took much bigger risks, now it's a well established currency the risk is far smaller and so everyone is in on it.

 

[John Connor]

I just bought a ASIC USB adpater on eBay. It's not the best, but I wanted to get my feet wet before I buy a bigger one. This one will make me about .19 cents a day. It can crack 333 MH/s. Now what pool do I join?

 

[Biftheunderstudy]

I calculate that at 0.10$/day using coinwarz.

The pool is really up to you, there is a lot of confusing data out there, but really they all average to the same over long time periods.

deepbit
eligius
mining.bitcoin.cz

Those are pools that I've tried.

Check out coinwarz and see my point about litecoin. At least when your mining hardware is obsolete you will still have graphics cards which have resale value. ASIC's have exactly zero resale value...

That same 333 MH/s converted to 333 KH/s for scrypt using a graphics card for instance would get you 0.71$/day mining litecoin....

 

[pm]

Difficulty went up 36% yesterday. So any numbers that you had of how much income you'd get per day, the numbers are all down 36% lower today. And I would expect at least another 15% rise in 10 days (although allchains.info doesn't show it yet) - if not another 33%.

The bottom lines of this spreadsheet:
https://docs.google.com/spreadsheet/ccc?key=0AmcTCtjBoRWUdHVRMHpqWUJValI1RlZiaEtCT1RrQmc#gid=0

are illustrative of the problem. It's unclear what the trendline will look like going forward, but I see no reason why difficulty won't continue to rise at a rate of at least 15% per month. The $/BTC might continue to rise to partially offset the difficulty, but it's hard to imagine that it will completely keep up.

I think Bitcoins were awesome last year, all the way into the summer of this year. But, John, I would highly recommend that you don't spend lots of money on ASICS.

I like Bitminter as well as a bitmining pool.

 

[John Connor]

If I had 1,500 bucks now I could buy a Avalon ASIC #2and eran some decent cash right now. You just need a lot of start up cash. ASIC is where it's at. They outperform graphics cards and the wattage used.

 

[Phaetos]

I have been half-way looking into this, mainly I don't like PC's just sitting around doing nothing when I'm not home. I see a lot about using USB based units, and using the GPU. Does it not use the CPU at all? Will it work on Virtual machines, since there is no major GPU installed?

 

[Biftheunderstudy]

The USB miners only use a little power and don't really use the CPU all that much. They should be fine in a virtual machine, a lot of people use a raspberry pi and a usb hub to run them.

That said, I do not recommend them at all. The rate of return on them is terrible, even at 40$ or whatever they are at right now. When the difficulty goes up even further, you will be left with a useless 40$ keychain. Even worse if you get suckered into buying an avalon or its ilk.

Mining litecoin or other scrypt based currencies are really the way to go. GPU's hold value quite well and according to coinwarz are several times better than mining BTC. You simply convert the alt-coins to bitcoin and sell. Something like middlecoin will even do all the work for you.

 

[Phaetos]

Thanks for the info. I think my post was a bit misspoken. I meant does bitcoin mining not even use the cpu, only gpu's? And would mining in general work on a VM?

 

[Biftheunderstudy]

Ah, I see now.

Bitcoin (and litecoin) can be mined on the CPU, however, they are pretty well useless. If you pay for your power you will *lose* money.

The GPU is the only semi-profitable way, and only if you have a GPU that has a good hash/Watt ratio.

As for running in VM's, not usually. You need to have full access to the GPU, meaning openCL or the like which aren't available in a VM. I think some of the enterprise versions have support for this?

coinwarz.com and googling "bitcoin hardware comparison" and "litecoin hardware comparison" will get you a good idea of what the profit margins are.