I have a noob bitcoin question. Even after all the bitcoins are mined there will still be a need for "mining" for all the active transactions, correct? How does that work?
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Can I Make a Living Off Bitcoin Mining? Probably Not
31–40 of 47 posts
Re: Can I Make a Living Off Bitcoin Mining? Probably Not
#32tl;dr: not with GPU but possible with ASIC
And possibly not with ASIC given the potential of multiple vendors worth of ASIC's coming online at roughly the same time. I believe at least one has shipped the bare hardware.
Several have shipped, including Butterfly Labs (although they're still backordered). Here's a review http://arstechnica.com/gadgets/2013/06/how-a-total-n00b-mine... Looks like they'll be profitable for a while yet.
Re: Can I Make a Living Off Bitcoin Mining? Probably Not
#33I have a noob bitcoin question. Even after all the bitcoins are mined there will still be a need for "mining" for all the active transactions, correct? How does that work?
There are two ways to get bitcoins from mining.
The block reward, which halves every once in a while, eventually hitting 0 after all are mined
And then the transaction fees. Basically if I want to send a BTC to somebody, I send the coin to them, and also sign over a small extra amount as a transaction fee. A miner who solves a block (ie, a bundle of transactions) can send those fees anywhere they like (their own account).
So in a long-run situation, mining effort will balance out transaction fees to come to some sort of equilibrium.
Re: Can I Make a Living Off Bitcoin Mining? Probably Not
#34Important note: this is not current information. Bitcoin and Litecoin mining have both changed a lot in the last few months, and this post is from April. I spent some time looking into mining about three weeks ago - with the proviso that my hardware would be free, since I run a 3D animation company that's in the process of transitioning to GPU-based rendering - and came to the conclusion that right now, it still ain'…
Was your conclusion that the power costs would outweigh the value of the mined bitcoins, or that the value would be marginal enough that it's not worth the bother?
Re: Can I Make a Living Off Bitcoin Mining? Probably Not
#35Earlier quoted context omitted.
Please don't mix supply with perceived value. It's deflationary in the sense that with passing time each coin is worth more than before. There is some correlation with money supply, but deflation ultimately means: how much can you buy for a set amount of currency. The inflation/deflation of the US dollar for instance is measured by statistics like the CPI, which boils down to how much consumer goods you can buy. If y…
OK, so with passing time, coins are worth more than before because the usage demand is increasing faster than the mining supply. I'm not sure if that is your argument though?
Essentially, yes. More precisely demand is increasing faster than readily available supply (people selling Bitcoins for goods or other currencies, also called liquidity).
Re: Can I Make a Living Off Bitcoin Mining? Probably Not
#36Important note: this is not current information. Bitcoin and Litecoin mining have both changed a lot in the last few months, and this post is from April. I spent some time looking into mining about three weeks ago - with the proviso that my hardware would be free, since I run a 3D animation company that's in the process of transitioning to GPU-based rendering - and came to the conclusion that right now, it still ain'…
Was your conclusion that the power costs would outweigh the value of the mined bitcoins, or that the value would be marginal enough that it's not worth the bother?
A combination of the two. Power costs plus wear-and-tear on mission-critical components weren't outweighed by the tiny amounts of money we'd make.
To be fair, there's a bit of a conflict between the best rendering hardware - Nvidia, because of CUDA - and the best mining hardware - ATI. Obviously, I'd have been mining on NVidia. However, the numbers didn't even make much sense using ATI.
Bitcoin mining has been screwed because of the dedicated hardware, which has meant a flood of miners into Litecoin - which has proceeded to screw the Litecoin ecosystem too.
I shall keep an eye on the situation - I suspect there will be pockets of opportunity in the future. But right now, not so much.
Re: Can I Make a Living Off Bitcoin Mining? Probably Not
#37Earlier quoted context omitted.
... if you're the average person. Usually, in a situation like this, it isn't too hard to out-execute the average person at some point.
The easiest way in this case looks to be somewhere with cheaper electricity than the average person.
That's the conclusion most of the Bitcoin mining forums have come to, at least last time I reviewed them.
Re: Can I Make a Living Off Bitcoin Mining? Probably Not
#38GPUs? It's ASICs or not at all these days. Start with an FPGA prototype that can be used to create an ASIC, like an Altera. If you want to muck around with this stuff for fun you can buy a Cyclone or Stratix for relatively low cost.
It's an older article, but it serves to show just how fast these things swing. Just as CPU mining became worthless when GPU mining took off, GPU mining is totally useless now. Even with free power it's barely worth the trouble.
FPGA is still viable, the chips are fairly cheap and performance can be improved with better designs, but ASIC will absolutely crush it.
The good news is that getting your FPGA design taped out as an ASIC is actually not all that expensive, relatively speaking. Some will give you a few hundred samples for around $15K. Not cheap per-chip, but avoids the $250-500K setup fee you normally incur with most ASIC runs.
Re: Can I Make a Living Off Bitcoin Mining? Probably Not
#39> The increase in difficulty isn’t necessarily a bad thing, as the more difficult it gets to mine the blocks, the more people are willing to pay cash for bitcoins
That's the problem with his logic. Bitcoin's exchange rate has remained pretty much constant while the difficulty rate has increased 10x in the last 6 months.
Re: Can I Make a Living Off Bitcoin Mining? Probably Not
#40The environmental ethics of this activity are horrible. Buy hardware that consumes lots of power and will soon be useless, and run it 24/7. I guess many of mans enterprises are just as unfriendly to the Earth but this one makes it particularly vivid.