Bitcoin Forum

http://blockchain.info/charts/hash-rate?timespan=180days&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=

I don't get it, why are people mining like crazy, even tough it's not profitable even with free energy?

It's time to pack up your gpu's and head home guys!

Who says it is not profitable?  In most cases the rigs running today are paid for.  So every BTC earned is additional profit.  When ASIC's hit, then the GPU or FPGA Rigs might not be profitable unless they get free energy. 

The other concept to keep in mind is that the your mining rig is generating BTC not USD or EUR or the such.  So, if you mine, in hopes that the BTC will go up, then you could cash out in the future at much higher exchange rates.

I hope this helps. :-)

Say what? Last time I checked, bitcoins were worth something. Free energy costs nothing. How does something - nothing = not profitable? ???

A) I don't have to pay for electricity, so as far as I'm concerned I'm generating free money
B) In the long term, if Bitcoin gets increasingly used, a Bitcoin will be worth significantly more than it is now

Even with my low hashrate and the risk of burning out my cards, it's worth it for me because I don't pay the electric bill.

I do pay for some things around here, and there will come a time (pretty much when ASICs come, and I have ordered one of those so I'm fine in that regard) when what I make in coins will not be worth it even with the electricity costs because I'm using my personal card and it could break or start to malfunction in the games that I play or I may be asked to pay part of the electric bill and that would put me in a position where I didn't care to pay that extra 5 - 10 bucks a month or whatever for my few dollars in coins. But that time has not come yet.

You also have to realize that as long as you pretty much break even, you can still mine. Most people made enough from their farms to pay for the electricity more than double, so they can still mine at a gain. It's not reasonable to turn off a card that might not have even paid for itself yet, just because it's only make a few cents on top of paying for the electricity bill. You are still making something... And the cost of coins fluctuates a good deal. You might mine at a loss for a bit and then start mining at a gain for a bit, back to loss, and so on.. yet overall always be making coin and in the end have a nice stockpile that is worth far more than you paid in. Bitcoin should also always go up in price over time, don't forget that.

You don't have to factor in the cost of your mining equipment once you are already mining, and if anything, if you do include the costs you paid then you need to keep them on as long as you can pay the electric bill and get a few more coins after that or you lose out completely.

I wouldn't tell someone that it was reasonable to buy new equipment in order to mine if that is what you are talking about. But that has nothing to do with why the total hashrate is still the same.

There is also something to be said about the ease of mining over using any of the Bitcoin buying services. The easy ones always give to a good deal less.

Well if someone has hard to sell stuff, then it's profitable, but people should always think about economic opportunity costs. For example I have a 600mhas rig that I can sell easily for 200€. To mine that 200€ at current difficulty if nothing breaks down would take around 8 months, and if something breaks it's one month for a gpu fan, three months for a psu etc.. And most people have to pay for electricity, so the margin is even worse. Basically I think that people are ruining their hardware for less than nothing.


You can always buy coins and support economy that way.. I was expecting difficulty to drop in few weeks around 20-30%, so that this would be profitable for even some of us.

With all these people out their yelling about how they have free electricity, I think I'm beginning to understand why I pay so much for electricity. And I'm not even mining.

The electricity is paid in the rent, so "free" is actually "paid by other tenants" :) :( .

Looks like the network speed has dropped 20% since I started this topic, so it just took longer than I expected. The next difficult is already ruined, but maybe it's possible still to mine for  a week or so before the asic's start to make a difference.

What's the problem? I pay for my electricity at my house. I run 1 rig at home. I have multiple other rigs running at my friends house.

He pays for his rent with inclusive electricity....



Send me some rigs.. I'll host some for ya.. 50/50 split on the profits.. so everything it mines :)

I'm just kidding about Germany's huge rises in electricity costs.  ;)

A lot of places pay ridiculous amounts for electricity. 

Year, but due to our bolt plan to get rid of nuclear power and focus on renewable energy we will face an increase of average 32% next year.

And we already have high costs.

I still hope that this will pay off in a view years, when we have advanced technology renewable energy sector due to this plan in the and are able to sell this to other countries.

But they don't see a 30% increase across the board all thanks to idiots voting "Oh, that Fukushima thing was pretty bad. I know, let's turn off all our nuclear reactors. That'll solve all our problems".  :'(

Yeah that would be nuts..... How cheap is natural gas for you guys? Were I live in Canada it's DIRT cheap.. 

Would it make sense to run a natural gas generator to run your home?

It's crazy that they are shutting down completely safe and profitable hardware. I'm not sure if it's wise at this point to invest at new reactors with all these renewables and stuff coming soon, but they should generate with the old hardware as long as they can.

In Finland electricity is so expensive partly because they have to fund those new reactors somehow.

Innnnteresting idea. I'm already on the gas mains. Let me get back to you on that.

My neighbor has a huge 24kw Natural Gas generator... It's pretty cool.  Not loud at all for how large it is.

Its already relatively wide used here.

6.1% of our country wide power consumption came from bio gas this year and increasing.

It's still relativity cheap, but with the current development it wouldn't be a save investment.

when people have the hardware and been mining for a while, what should they do if they stop mining? they prefer to do what they have been doing rather that just sit and see others doing the same thing they've been doin! ;) u know?;)

In my case I'm covered by solar in the summer... and micro hydro in the winter.

But also, I use mining to heat my house and garage.

All this talk about electricity usage I'm wondering if anyone has a "green mining rig." All I can imagine is a bunch of ASICs hooked up to some solar panels.

A lot of hashing power is coming from botnets (network of infected computers).
Even if the block reward drops, they will keep on mining and making money.

Well most people know about this, but is there any rough stats on how much power is actually coming from botnets?

I honestly don't think so, maybe back when CPU mining was the thing, but now they'd have to infect people with certain model's of ATI GPU's or mining FPGA's to amount to any amount of hashing power.

Remember that botnet operators don't pay for electricity. So if a 10000 nodes botnet is idle, better make it generate 10GH/s (assuming 1MH/s for each host with a stealth mining mode not using all the CPU power) than sit doing nothing.

A very rough estimate would be around ~1TH/s.
I have been keeping an eye on the hashrate of some miners on pool, which I suspect to be botnet miners.
I can tell you that I have seen multiple suspected botnet miners reach 60GH/s.


You can go with the estimate of ~3MH/s.
From my analysis, I concluded that number to be the general hashrate.


The big numbers of infected computers compensate the low hashrate.

I would think that a botnet owner with a 10,000 node botnet would be making a lot of money from it, so much so that the proceeds from mining on it would be nothing in comparison & not worth the risk of having the owners of the infected machines wonder what is using up all the CPU time. Maybe I'm wrong though.

Anyways, 1TH/s is only 4% of the network, definitely not the reason why the hashrate hasn't dropped if that is the hashrate of botnet miners.

I do this because I believe their cannot be a true free market if it is controlled by a central bank.  More importantly my business is just that and should  not be scrutinized by some central authority. 

Of course there are green mining rigs ;) To power one 220 MH/s FPGA from ztex you need 10Watts which you may easily harvest with one 50WP solar module even in european wintertime. In summertime its possible to to run this FPGA 24hours with one battery buffered 50WP module, in wintertime the energy harvested by such a module is enough for powering 2-4 hours a day, the rest has to be payed...

We're already heavily subsidizing photovoltaics for about 15 years now. Does it pay off? Fuck no! The Chinese make all the panels.

Screw subsidies, let the free market be free already, fucking Merkel and everyone else.

Sorry, had to vent.

The problem with solar mining is you have 1/3 of a day of good sun and lose 1/3 of your watt capacity to losses during the charging your batteries.

So if you had 100 watts worth of panels it could only drive about ~20 watts 24/7 assuming no bad weather. (however maybe in the future you could get a few gigahashes with just 20 watts)

I will still be mining on 1 small rig intermittently for fun but I am sure the best place for small timers like me is to forget mining and just purchase them with $.

You are correct. In most cases, miners make "profit" because the have not added together all the actual costs and risks involved (dead GPU, time spent fine tuning it etc.)
What's even stranger is that most miners refuse to understand that mining is actually buying the coin while paying to power Co and hardware manufacturers and so on. At some price/difficulty level this was profitable but now it looks less and less attractive. If someone call 10 EUR a month as profit, they are better off collecting cans :) and probably make way more.
   
Lets say you bought a fancy GPU(s) 6 monts ago and spent X. What if you took that X and bought BTC? Not only are you liquid this whole time but your risks are also way lower.

Adding those imaginary ASIC's and FPGAs to the picture and you realize that small-time mining is doomed :(
Good news is that GPU's are perfect for LTC and looks like some have switched over to litecoin :)
Regardless, mining is just like building and maintaining the infrastructure - "building the roads". Now we need the vehicles, so the roads can serve it's real purpose. What I mean by that is we need more useful services. If you subscribe to the ideas of modern economical models you realize that everything revolves around spending and not hoarding. BTC economy is not different. Miner do not give value to the BTC - services and goods do.   
Cheers!

I think you are absolutely right. Mining in my opinion is a silly and expensive project. sure it is necessary and it is not my place to downplay such a task. resources could be much better used elsewhere. think, if people mined coins and just held them, they would have destroyed the market and liquidity to the point the coin would have scaled harder and faster than 30usd per btc. that being said i think this post I am writing is completely stupid. people, keep mining and keep selling your coins and ringing the register.

Mhh, imagine if you get 100 servings of icecream for free BUT you have to give away 20 servings to others, you still have 80 for you to eat, right?. Eat these 80 and be happy instead of grumbling.

yeah well if you want a kilowatt farm your going to need more than apple analogy to explain it.

i worked out i make about 2 pence/hour with my gpu, Nvidia 560Ti lol i spend more money on electricity

Nvidia is not good for mining

Haven't really caught up on where mining was at until now. Haven't mined since the advent of bitcoins. I remember when it was very profitable to mine on my two Nvidia 460's. Now you wouldn't make a cent!

I calculate that the two video cards I have left (a 5850 and 5870) are currently making about 0.1 BTC/day.  I assume they use around 300w of additional electricity beyond just letting the computer idle (which they would be doing anyway).  At $0.10/kwh, 300w means $21.60 in electric costs.

Revenues: 3 BTC/month = $40.80
Expenses: $21.60/month
Profits: $19.20.

Plus, it keeps my office room warm, and the only other option is electric coil heat, which would be exactly as expensive.  May as well generate some BTC with that electricity then.

I realize there is additional wear & tear on the cards, and I AM starting to hear some noise on the 5850 fan.  So there is an additional expense there.

When ASICs are released, I'll stop mining with GPU's.  $4/month won't be worth it.

Just a couple little FPGAs going, sipping power. - And the GPU in most-used PC does general purpose while mining and providing heat, so it won't stop mining until difficulty at least quintuples. We otherwise don't use much electricity, keeping most of the electricity used for GPU mining in the reduced price tier of the electric company's billing. Cablepair's offering a decent sum for FPGA chips ($75/spartan6 + FS), but not worth it until ASICs hit.

It's complicated, but here's a couple.

I think people are still mining because they hope the coin price 2x's, which makes up for the reward drop
I think people are still mining because they haven't done the math.

(While some people undervolt/passive-cool/etc) Since the block reward drop, as a -loose- generalization, if you pay more than -about- 11 cents/kw/hr for your power, and you run GPU's, It's costing you more to run the equipment, than you're making in coin.

Also, the difficulty IS taking an obvious downturn now, so some people have definitely shut off their machines.

http://bitcoin.sipa.be/speed-small-lin.png

http://bitcoin.sipa.be/

price is good now why not mining ?

Even after the reward drop, miners are still producing on average 108'000 bitcoins per month. To some extend, miners control the supply of bitcoins, and thus the price. If miners feel the current price is too low for them, they should hold on to the bitcoins and sell them later when the price is right. By lowering the bitcoin supply, miners can drive the price up.

If miners dump all the coins on the market as soon as they are produced, they increase the supply of bitcoins and tend to lower the price. If selling bitcoins at current price would result in a overall loss, miners should hold on to the bitcoins until they can sell them for profit.

However, historically, market players do not always play the optimal strategies. Market dynamics are thus complex to predict. Time will tell.

Well, there's two flaws with that thinking:
- that miners work together cooperatively
- that the future price is predictable

Well I simply wanted to point out that miners can, to some extend, control the price by controlling supply. Obviously, you can't predict the future price, but you can play on the parameters that influence the price. Supply being an important parameter.

I often have the impression that miners have a mine-dump strategy where they never hold on to the coins. By playing this strategy, miners surrender their power and give the supply forces to market players.

Imagine that all miners decided to hold on to their coins and sell them at 30$. The new supply of bitcoins would be completely stopped and the price would most likely go up according to current trends. Of course I'm not suggesting that all miners should do that. It's only a mind game to understand the influence of the supply-side of the market.

Miners that find themselves in an unprofitable situation today with the current price, should consider mining and holding on to the coins. You're in a net loss only if you sell the coins. Of course, thats a personal decision to make and there is some risk involved, especially if your time preference is low due to credits or otherwise.

why don't miners quit mining, the reward dropped already? I'm just curious about all this sh*t... I expected a free fall in mining, so the rate btc/usd goes up rapidly. so what now?!

Errr - Price (and amount of BTC awarded per block) affects how many people mine, not the other way around. If the price increases, more people will mine because it's more profitable. Also worth noting - more people mining doesn't increase the rate at which BTC is "produced," just who owns newly-minted coins (rather, 50BTC blocks are split among more people if more people mine [assuming all have equal hardware], but BTC won't be awarded faster or in larger quantities just because the network has more hashpower behind it).

It's also Winter in US/Canada, so people might mine until mid-Spring because the heat GPUs produce is also valuable (when it's hot, the heat's undesirable and not only wasted, but might be costly for people who try blowing the hot air outside). I don't think there's data on hashrate distribution by country, but I'd assume US/CAN make up >25% total. There are some people who speculate BTC price will increase, so mining now at a loss might result in net gain mid-term or long-term - an idea ciphermonk notes. GPU mining also isn't necessarily unprofitable -- some people mention having electricity included with their rent, but even for those who pay for electricity by KWh, the price is high enough and difficulty low enough where some can still make a small profit. Some people actually mine on principal, too, thinking increasing network security (however minimally) is itself valuable. Finally, FPGAs are in the wild, and while they probably don't make up too large a portion of total hashrate, it's worth noting those won't be unprofitable to operate until the ASIC backlog is cleared by manufacturers.

Probably a lot of other reasons I didn't think of, and there are plenty in this thread already, but anyway - there are many reasons people still mine.

Look at the silver mining market. The miners don't control the price there, they have costs and must sell. They even SHORT silver to lock in a price they can live with because of fear (best practice, not being in line of fire of shareholder in case price drops). Same with bitcoin. Miners are not speculators per se.

EDIT: and no, they don't control the money supply of bitcoin. The could try to control the supply on the markets by forming a strong cartel, but I'm not sure this would be impactful enough.. there are a lot of coins stashed away by hoarders/speculators that will come to market on rising price. So this might or might not work and it'll be quite a long game I doubt miners are ready to take the risk of playing seriously.

Well the FUN factor is still something to be considered for some

probably a luxury for the others who have done the math  ;D

Ok, your last paragraph is most certainly wrong.  Miners mining at a loss would have more coins if they spent that money on coins instead of electricity.  Unless those people are still mining simply because of ideals (wanting to help the Bitcoin network, etc), there is no reason that anyone should be mining at a loss.

Also, I took a poll a few months back... the vast, vast majority of miners who answered the poll actually hold their coins.  Obviously, it's not scientific, but I was surprised that I was one of the only ones who regularly sold or used all the coins I mined.  Of course, I've been holding on to them myself for the last couple of months, and plan to generate a nice collection of them now.

I mine to heat my house. Before it was free heating, not it is very cheap heating.

Im new and just starting to discover the btc world. It sounds like its too late in the game to really start mining now wish I would have known about all this stuff at the beginning but ether way I'm glad to be apart of it now lol

2 years from now, people will be looking back to today and thinking the same thing.  Consider yourself fortunate to have discovered it when you did!

I'm mining just for fun and to get some Bitcoins, who knows? Might get hilariously lucky.

I started out GPU mining but now I invested some money into ASIC technology (http://www.youtube.com/watch?v=nfIVsgXnjmI). Hopefully I'll be mining again with it soon.

I figure why not. I am mining diff types of coins too so there is that.

And since its winter... free house heating!

For me the Electricity costs are less than 10% of what I"m making, So I'm still making 90%.  Why would I stop?

Nice numbers

I am not really here for the topic, sorry about this post,
I just wanna contact gyverlb due to I am a super noob on board that can't send message, hope he will read this,

hi there gyverlb, I just read about your guide about P2Pool two days ago and that really helpful,
but there is something that I need to confirm,

which port exactly do bitcoind need for P2P connection? 8332 or 8333?
the man page said 8332 is for RPC connection so I think you made a typo in your guide?
or I misunderstood the document?

hope you can enlighten me, thanks.

Its still profitable!

Been mining since the last big spike to $30.

For heating the apartment

It's profitable but you can hardly call that profit compared to what the ASIC people are banking right now.