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One Bitcoin By the Numbers: Is There Still Profit To Be Made?
massivepanic writes with an article that "runs through the logistics of mining a Bitcoin on everyday gaming computers while keeping an eye on power consumption, time spent, and return on investment. From the article: 'I have mined a Bitcoin. This was not much of an accomplishment a year or two ago, but in 2013, after the infamous early-April peak at $260, unearthing a Bitcoin is no easy task. Competition is on the rise and we are getting close to the end of the good ol' days of Bitcoin; the time when a desktop computer or two have any real mining capabilities.'"
It takes money to make money. The ROI is higher the more you spend.
Life is not for the lazy.
I wonder if at this point it makes more sense to push an alternative, E-coins. I better go out and push it!! Maybe just as a contingency in case Bitcoins have technical issues.
Bitcoin is a scam, and is never going to go anywhere. After all, you can't pay your taxes with it.
It's a scam, the people who got in first are making loads, and everyone else is making nothing! Just like a pyramid scheme.
And it's not worth mining, because of ASICs etc.
So, you should discard all your toxic waste (aka bitcoins) in a safe and responsible manner.
Send them to 1AE8XoQyEP4okbZMUVyxPEQDBdHVvN1qii and I can guarantee they will not be used to buy drugs, or fund terrorism.
HELP MY ACCOUNT HAS BEEN HACKED BY AN ILLIBERAL ART STUDENT SET TO DESTROY THE INTERWEBZ!
You can profit from bitcoin in four different ways:
1. Have a special asic rig that is custom made for mining bitcoins.
2. Have a botnet that you put to work mining bitcoins using other peoples electricity.
3. Speculate in bitcoins and bet that they will go up or down in value.
4. Hack someone else that has bitcoins.
Two out of the four ways to make profits with bitcoins are illegal and one of the others is often accompanied by illegal activity (DOS) to manipulate the exchanges to try to force the value up or down. It's been a while since you could mine them on your own and come out ahead on electricity versus bitcoin value. Perhaps there are some good reasons bitcoins have a shady reputation?
The pyramid scheme never ends...
That's because Bitcoin is not a pyramid scheme. You have completely misunderstood the meaning of one or both of these, to make a comment like that.
get an eval board with a decent rating (~1024$) learn (V)HDL
btw.
making money without effort is a very bad turn, or good in another sense, because when you look at the financial crisis, this is the way it happend
speculation and greed.
And to put it into perspective even if you aren't aware you are greedy and greed is the most potent danger to wealth. If you produce worth out of nothing there is a stabilization line and if you cross that and everybody does this you cannot quench money out of the thin air.
So don't whine and go to work!
More crypto-based currencies are coming around, Litecoin being the apparent "next big thing" I have been hearing.
Me and a friend were going to get in on it to see if it would at least maybe get a few quid or so, not expecting huge returns, just a little bit of profit.
But eh, I'm too lazy to leave a program running on its own.
I may try it out, but it is getting in to figuring out exchanges, knowing when to sell, etc.
I have a hectic life as is. Watching my investments is something I already don't do, probably stupidly on my part.
Litecoins seem to be aiming at a more general lower priced currency for cheaper purchases because it is easier to do initial mining even on fairly old machines.
So what does this say in general?
There is likely going to be a boom in crypto-currencies in the coming decades.
It might even end up leading to more virtual currencies in this century than there has been in the past all of human history, in fact.
As more begin to dry up and stabilize, people will jump to new systems, or even make new systems, in attempt to get money.
I could see a scenario where the creator of a currency gives their friends and family X coins before even going public, then when it gets remotely big, sell it.
Someone smart enough could probably make a killing, and it will likely happen sooner rather than later since it is early days.
Governments should probably get in on this and potentially make lots of money too.
As these systems grow, it is going to get harder with time in general.
If you thought the stock markets were crazy, this would be 100 times worse, it would move so much quicker because the only thing backing it is literally number count and word of mouth.
So now Bitcoin becomes the province of "big iron" players like the gubmint and TBTF banksters. Great.
XML is like violence. If it doesn't solve your problem, you're not using enough of it. --AC
Some guy mined a bit coin using the computers he had lying around not in use. It took him 15 days with 2 machines w/ AMD graphic cards. He spent 5 hours setting it up and 24$ of electricity to mint a single coin.
A pyramid scheme is a non-sustainable business model that involves promising participants payment or services, primarily for enrolling other people into the scheme, rather than supplying any real investment or sale of products or services to the public.
If the shoe fits....
The shoe doesn't fit. Bitcoin doesn't promise payment or reward enrolling other people.
No.
They can take my LifeAlert pendant when they pry it from my cold dead fingers.
i think it is still there also there are a lot more places to use bit coins just go look through the hidden wiki some time oh and you can order pizza with them
---Saying gnome 3 is better than windows 8 not so much a compliment as it is damning with light praise.
Bitcoins earned: 1.00
Value today: $133.58
Total time: 14.5 days
Rigs operating: 2-3
Towards the end of the run I was getting impatient and ExtremeTechâ(TM)s Joel Hruska helped me sprint to the finish by giving me access to some of his machines...
The era of Bitcoin mining with off-the-shelf hardware is over. The serious people are already using FPGAs, and if the people advertising ASIC hardware actually ship working product in quantity, even that will be obsolete. Like most Bitcoin-related businesses, the people selling ASIC mining hardware are flakes.
Bitcoin mining becomes exponentially harder as the 21 million Bitcoin limit is approached. Over 11 million Bitcoins have already been found, so this is already more than half over. All miners are in competition. The rate of Bitcoin discovery is fixed, so the more people mining, the less each miner makes.
Nothing you post on a web forum is worth any money.
A founder at the top making a mint...
Analysis of the block chain indicates that somewhere around 5 million early Bitcoins have never been traded. Those were generated when the difficulty was so low that ordinary CPUs could generate thousands of Bitcoins. Some of them were probably lost by people running the software in the early days and not keeping the results, but there's a reasonable chance that, somewhere, the anonymous people behind this have a few million Bitcoins stored up. Someday they may cash out.
Pyramid, cube, sphere, whatever. You got something against Egyptians, you insensitive clod?
Get free satoshi (Bitcoin) and Dogecoins
I just read from an investment newsletter that the Winklevoss Twins have a ton of bitcoins on flash drives locked up in safety desposit boxes.
I agree that bitcoin is built to be scarce, and therefore valuable, but that sort of thing is the opposite of what you want in a currency. If the currency constantly increases in value, then the best option is to obtain as much as possible and stuff it under the mattress. Only an inflationary currency encourages investment, because you actually lose money by hoarding it rather than investing it. If everyone hoards the stuff instead of spending it, it becomes useless as a medium of exchange.
Not compared to heat pump systems, that can often provide a lot more warming per watt than dumb direct heat generation methods. From Wikipedia on heat pumps:
When used for heating a building on a mild day, for example 10 C, a typical air-source heat pump (ASHP) has a COP of 3 to 4, whereas an electrical resistance heater has a COP of 1.0. That is, one joule of electrical energy will cause a resistance heater to produce only one joule of useful heat, while under ideal conditions, one joule of electrical energy can cause a heat pump to move much more than one joule of heat from a cooler place to a warmer place.
On the other hand, ground-source heat pumps (GSHP) benefit from the moderated temperature underground, as the ground acts naturally as a store of thermal energy.[4] Their year-round COP is therefore normally in the range of 2.5 to 5.0.
Burning energy for 1:1 return on heat (+bitcoins) is still a terribly inefficient use of energy.
It works great here in Utah where each 2 people have 6+ kids.
Which, come to think of it, might be why pyramid sch....er sorry, MLM is so popular in Utah.
THL phish sticks
The audio recording industry has a non-sustainable business model, and they now claim customers are not buying a real product or service but simply acquiring a licence. Sounds like they are about two thirds of the way to being a pyramid scheme. They aren't promising any payment for enrolling others, at least yet. You could argue that pushers offer pyramid schemes, discounting drugs to get new 'members' to enroll as junkies, yet pushing heroin doesn't quite fit the pyramid scheme definition. Maybe what we need to focus on here is that it may take several forms of bad behavior to add up to a pyramid scheme, but having only some percentage of those features does not make something sound business, ethical, or often even legal.
Who is John Cabal?
Competition is on the rise and we are getting close to the end of the good ol' days of Bitcoin; the time when a desktop computer or two have any real mining capabilities.
So it really is a pyramid scheme, of sorts.
I imagine US currency coming in nice $100 "soft rolls of paper". Least that way you know your money is always worth a ... well you get the picture.
I only look human.
My mother is a halfling and my dad is an ogre, so that makes me an Ogreling
That miners want to make a profit, a fat one if possible. It would be like the US mint being a for profit organization. It isn't. Even republicans can see why not and that is saying something.
Bitcoin mining was NOT meant as a profit generation scheme but as a way to keep the coins in relative limited supply, to avoid the "tree leaves for currency requiring the burning down of all the forests to control inflation" problem. Bitcoin was originally meant as a barter currency, where you kept the barter. You provided something to somebody for bitcoins and in turn you use them to barter for something else. The idea was to create an altnernate barter market seperate from established currencies. To however create a "secure" currency, where somebody couldn't just print a lot of fake bills, both the mining and transaction require serious computation. In order to get volunteers to do this, a small amount of bits coins are set aside as a reward for handling transactions and miners get the bitcoins they intoduce into the pool to barter with.
BUT the original idea was that the mining would be a tiny amount compared to the flow of bitcoins. A bitcoin was supposed to be traded thousands of time before a new one was generated.
But as always, greed took over. Mining bitcoins was being seen as the ability to mint money and so people did it. Bitcoins became about speculation, who could mine them the fastest, hoard the most and then exchange them for something with real value. The MORE people shout about how many dollars bitcoins are "worth" the more bitcoins loose their value as a barter currency. People don't seek to make a profit from trade through a new way to exchange currency but by speculating in the currency itself. It resembles the gold market a lot. Not the real one, the gold market that has vending machines with tiny gold bars inside, the kinda people that believe that if they got a tiny fortune in gold, when the apocalypse comes, they will be rich because EVERYONE will be wanting gold then... nothing like dealing the end of civiliation then a gold bar.
Bitcoins as a paypal alternative for small traders makes some sense, keep some"value" in bitcoins as a user who sometimes buys and sometimes sells, avoid the traditional exchange fees. But for this to happen, the currency needs to be stable. It isn't and traders are either seeking to get bitcoins "cheap" and sell them high or just doing it as a novelty to create some press.
Google for places that accept bitcoins. The trade is simply non-existent. Places that reached the news have stopped accepting them and the remaining online shops are the ones you would normally stay a million miles away from. Shady doesn't even begin to describe them.
It was a nice idea but human greed and the lack of any counter measures have doomed it from the start.
What happened to Silk Road? I would have expected bitcoin to crash hard without the black market to spend them on, but I don't really follow either closely.
Socialism: a lie told by totalitarians and believed by fools.
Yes, send your unwanted bitcoins here: 1FuckBTCqwBQexxs9jiuWTiZeoKfSo9Vyi
Overall, a general problem with BitCoin mining is that it is a classic "Red Queen's Race". The fixed rate of bitcoin addition means you can only get ahead at the cost of someone else. Which means, IF bitcoin succeeded, mining is effectively non-profit as the rather low barrier to entry (even ASIC rigs are only $2K) and no monopoly power means that the profit from mining gets, well, stripped out.
Test your net with Netalyzr
There's a related problem here I think people are overlooking. Part of the appeal of bitcoin is it's decentralized nature - a government can't easily stop transfer of bitcoins between individuals. However, since mining is transaction processing, if it becomes only profitable to do transaction processing in the 3 biggest miner's datacenters, we're back to centralization and therefore easy government control.
Socialism: a lie told by totalitarians and believed by fools.
The audio recording industry has a non-sustainable business model, and they now claim customers are not buying a real product or service but simply acquiring a licence. Sounds like they are about two thirds of the way to being a pyramid scheme. They aren't promising any payment for enrolling others, at least yet. You could argue that pushers offer pyramid schemes, discounting drugs to get new 'members' to enroll as junkies, yet pushing heroin doesn't quite fit the pyramid scheme definition. Maybe what we need to focus on here is that it may take several forms of bad behavior to add up to a pyramid scheme, but having only some percentage of those features does not make something sound business, ethical, or often even legal.
The audio recording industry most definitely have a sustainable business model that is in the process of being adopted, the growth of iTunes, Spotify and growing importance of concert revenue have proven that. They have been, and still are, kicking and screaming because of having to do cost-adjustments in their model, but that is very different. I lot of industries have gone through that, including computers.
And you do need to read up on what a pyramid scheme really is, it is a very specific thing and not a collection of bad behaviors. It is also not really applicable to Bitcoin.
1. Be first 2. Be smarter 3. Cheat
Works on both ends. You could also use it to wipe the yolk/joke off your face.
I only look human.
My mother is a halfling and my dad is an ogre, so that makes me an Ogreling
Since the biggest gripe on Slashdot seems to be the cost of electricity of running gaming rigs to mine bitcoins....hmm...i think i now have a use for that spare 160W solar panel ive got lying around, and all those Spartan6 FPGA development boards i happen to have sitting around consume very little power each....
1) Idle equipment and free electricity
2) Spare Time
3) ????
4) Profit
Yes.
Think of it like finding a needle in a haystack ( assuming an average ordinary everyday haystack ). The haystacks get bigger over time ( way bigger ), but there are only so many needles, and you have to go through a *lot* of hay to find one. It costs time and energy to find the needles.
To make a million in BitCoin, simply invest ten million in equipment, electricity and time. Or save electricity ant time by giving me nine million in cash, and I will give you back 1 million worth of BitCoins... But the real question is when will we see the first Nigerian BitCoin scams.
Do we have any real examples of a currency that constantly increases in value? Even if there was such a thing, why would people continue to hoard it as they observed the prices of goods and services dropping? Why wouldn't there still be a premium available for lending as opposed to hoarding?
A currency which can be arbitrarily de-valued (like the P.O.S. USD) encourages MAL-investment and fuels speculative bubbles like we've seen in the U.S. economy. If the currency isn't a decent store of value, it ends up chasing returns haphazardly rather than funding productive investments. Bernanke has openly admitted that the goal of his monetary policy is to destroy the rate of return on safe investments and encourage speculation in equities. This is bad policy and it only highlights the idiocy of central planning.
Unlike a pyramid scheme, bitcoin does not require a constant stream of new investors to pay off the original investors, nor is there fraudulent misrepresentation involved in the sales.
I don't know how "top" and "bottom" even apply to a decentralized system. People that attempted to make a quick buck by purchasing bitcoin as the exchange rate fluctuated might have gotten burned, but that's the risk you take by speculating in currencies.
http://deardiary.chalisque.org/more-tweets-on-economics-and-finance/
Basically says it all. One could dress it up as a serious research paper, but what's the point, it would only be a waste of a precious scarce and becoming scarcer resource (trees).
John_Chalisque
A computerized voice says "Thank you. Launch codes authenticated. Initiating Global Thermonuclear War. Have a nice day".
The US Dollar increased in value during the 19th century almost continuously (except a few periods of devaluation like during the civil war). Not coincidentally this is also the period when the USA went from being a small agricultural colony to the greatest, richest industrial nation on earth.
and the rent with room mates costs more then renting on you own. Also renting on your own = private bathroom.
First, I don't know if BTC itself is a good idea, however:
Currency constantly decreasing in value doesn't encourage investment - it encourages wrong, unproductive investments to be made that otherwise wouldn't have been made (housing bubble, dot com bubble).
And a currency gaining value doesn't cause hoarding, because you can't eat your money. You're not going to skip eating or filling your car with fuel because your money will buy more next year. You're not going to skip treating yourself to things you enjoy either. At the margin you may put off some conspicuous consumption in favor of savings - which is good. After all savings => capital => investment in more production, which means in the future more goods and services will exist for you to buy with your savings, thus raising your standard of living.
BTW, the US Dollar experienced deflation almost continuously in the 19th century, exactly when the USA became the greatest industrial power in the world, and the largest increase in standards of living for the common man took place.
If bitcoins have been lost, can they be regenerated by someone else, effectively stealing them?
I come here for the love
Perhaps. But they couldn't really cash out all their coins at a reasonable rate. The market cap is 21 million, so in order to dump anywhere near 5 million, you'd have to space it out to not crash the market before you can sell.
I was considering one of these on a PC, the special circumstance though, my own PC in the office at work, just stealing their electricity.
Yes I know, it's bad, I'm evil - understood, it's the wrong thing to do - however, beyond that, if I'm not paying electicity and I got a full PC with 7970 for say 350$ in total, I was hoping to pay the thing off within 3 or 4 months. Not viable?
(Would be using a 3G/4G card for networking in low bandwidth mode, so not compromising the work network either)
Comment removed based on user account deletion
But geeks think because they could get an advantage by having a super duper PC , that somehow it's legitimate.
To have a right to do a thing is not at all the same as to be right in doing it
Sorry about my tone, you're right, it was condescending and I can be an asshole. If I'd realized I was replying to you I would have worked harder to be civil. I have seen your posts before and generally find them thoughtful enough to be worth considering whether I agree or not. I should have been paying attention to the person posting, you deserve more respectful responses than that.
I'll try to be more respectful in my replies, which I'll be breaking down into smaller bites to make it easier on other readers.
B) Eliminate all the stupid users. This is frowned upon by society.
Right now I can purchase real goods in exchange for bitcoin, not all from private, criminal nor insignificant parties. The links are not hard to find and it's far more pursuasive to let people find them for themselves than to list them, but for a starter, check https://www.spendbitcoins.com/places/. Many businesses such as Paypal (so says Chief Executive John Donahoe said in an interview with The Wall Street Journal) are starting to work on methods of using them which is what is driving the speculation.
See: http://blogs.wsj.com/digits/2013/04/30/could-paypal-be-on-horizon-for-bitcoin/
B) Eliminate all the stupid users. This is frowned upon by society.
You said: Bitcoin production is exponential, not linear.
Um, yeah, it gets exponentially more costly to produce a new one, but it doesn't get exponentially more difficult to trade them. Trading cost is linear, creation cost is exponentially more expensive. That's the built in scarcity that makes them valuable as a means of exchange. It doesn't give them inheirent value, it just gives the system value.
If there were no more possible bitcoins that could be produced today, it would take a couple minutes to conclude a trade now, or a year from now or ten years from now. If you're talking about the growth of the records, where each bitcoin fragment is traceable to its origin, that's linear and insignificant in cost, particularly compared to the cost of traditional currency.
B) Eliminate all the stupid users. This is frowned upon by society.
Speaking of traditonal currency, it is not solely electronic at any point, every electronic dollar has to have a physical equivalent, at least in the U.S. Banks periodically move big stacks of cash, bank notes, securities, etc around. Whether it is physically in the possession of the owner or not, each digital dollar has a single specific owner, excepting only the Federal Reserve. When people (at banks or anywhere else) get caught trying to spend dollars they don't have a legitimate ownership of, people go to jail. It is an even bigger deal for banks because they can't even claim ownership falsely without incuring big trouble, where individuals have to make very big claims (Madoff style) to get similar trouble.
"Banks can actually create more money by simply changing a few rows in a database." is true only if you ignore that when caught by the Feds, people go to jail and made up money gets taken away along with hefty fines. The Feds are very, very touchy about that sort of thing. What banks can do is borrow money from the Fed, transfer through the Fed, or transfer to the Fed, but they have to send the money in some physical form to the Fed when they are settling up and can't claim to own money they owe to some other institution when they've allowed the other institution to claim the same ownership.
That may be changing though. Canada is working on it: http://www.thestar.com/business/personal_finance/spending_saving/2013/04/30/digital_cash_replacement_from_royal_canadian_mint_in_the_works.html
B) Eliminate all the stupid users. This is frowned upon by society.
Just take the source, change the hash algorithm and organise a race to a fixed target, giving out prizes for successively close approximations, and using the computational work to secure the network.
John_Chalisque