Bitcoin Forum

Hello, I've just got into bitcoin mining and want to invest more into it. I was going to start on the butterfly labs jalapeno, but people on another forum have told me that it's not going to work out for me, something to do with difficultly. (Don't know much about it) Could somebody help me determine if I will be making profit or not. I've been looking at online bitcoin calculators, mining at 5000Mh/s should get me $13 a day, so in a month, I should have my money back. (Miner = around 250-300) So, what do you guys think? Do I need to look at upgrades or something? (tight budget :/) Also, I've heard of time kind of over clocking for the butterfly labs jalapeno, for like 8Gh/s

Thank you for ready!

Dont think about getting a miner until you do some serious research and understand the difficulty changes and how that relates to network power.  The bitcoin wiki https://en.bitcoin.it/wiki/Main_Page should help you out here.

Now is an interesting time to get into mining, it's highly speculative and there is huge potential for epic losses, and not so much chance for epic gains.  Be wary with your purchases, and do your research.

There is lots of information out about what your asking, so people (like myself) will be hesitant to spell it out for you when you can do the research yourself.

<gribble> The expected generation output, at 5000.0 Mhps, given difficulty of 65750060.1491, is 0.0382438065677 BTC per day and 0.00159349194032 BTC per hour.
which is ~$4.90/day

Difficulty will increase in 4-5days (every 10-12days currently), at which time your earnings will decrease

As stated above. Stop. Get yourself a cheap GPU or maybe a single ASICminer USB. Play with them. Learn about mining. Spend lots of time on these forums, reddit and the Bitcoin wiki. If you continue straight down this road without proper knowledge of how Bitcoin mining works, the technicalities of it and the history, you will be unable to make proper decisions with regards to investments.

If you decide to go ahead, I have the following advises:


-> Have a thorough, not just surface understand of difficulty re-targetting. When you can properly model your own estimates, you will realize that these "online calculators" are absolutely useless until the difficulty settles down to be consistent again. ie, after a significant number of ASIC companies are consistently shipping in bulk. Make your own models and trust yourself and your research, not others.

-> Further on the above point, understand even the small details of mining, such as understanding the average time between blocks is often less than 10 minutes when network difficulty is increasing rapidly and what that means. There are many small details you might want to make a mental note of with your estimates but not actually write down.

-> Have practiced mining small-time with GPUs or a block erupter and be able to deal with any issues that arise. Downtime. Miner failure. Miner issues. Software issues. Heat. Expansion. Maintenance. Etc. This is computer knowledge and technical knowledge. I don't recommend someone mine if all they can do is put together a plug-and-play solution.

-> Security: Keep your coins safe.

-> Because of "something to do with difficulty" combined with the fact that most ASIC orders that will make a return if received now are either backlogged or still pre-orders and non-existent, you will have to pay attention to the ASIC market and make mostly pre-purchases when A. They make sense based on the manufacturer's estimates and B. They fall within your risk limits financially and by the amount you trust the company.

-> Adding on to the above, diversify for this exact reason. To mitigate risk. The problem with that is diversifying will require significantly more capital due to the high cost of even the lower-end units from many companies.

-> Track everything. Track your financials. Track your balances. Track the market. Track the ASIC companies' progresses. Understand what you are potentially getting into.

As a sort of summary of the above, let me make it clear that mining is no longer a small-time game as it used to be. Mining for returns now requires capital and proper planning. The days of the hobby miner making a return after a few days on the forums and a digital trip to newegg, are gone. Serious miners are who are emerging now. If you intend to make money, you can no longer buy whatever and start mining like you could last year.


Now, that said, if you want to do this as a hobby, buy something you can get now or soon, such as ASICminer equipment and do not expect a return. My modelling indicates a 12 month return of 67% of your original investment. I personally don't like modelling more than 6 months though due to the unpredictability of everything Bitcoin. Besides, due to the difficulty, most of the return of that 67% will be within the first 4-6 months if you get the unit right now.

mokahless +1 . nice speech

Where were you planning on getting a jalapeno? If you pay more than $400 for one in the secondary market you will not recoup your investment. If you order from BFL you will not get it in time to recoup the $274 cost.

Don't even bother trying to mine BTC, if you aren't in by now you're too late.  You will only lose money.  Look into Scrypt coins which are ASIC proof, at least for now.