Bitcoin Forum

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why would difficulty be doubling by the end of the year?

Payout halves, it's essentially the same thing as difficulty doubling: You only earn half as many coins with the same hashing power.

with one critical difference ...

Many GPU miners will likely drop out, so difficulty should decrease.

Maybe a few, but the MH/$ of FPGAs (along with other issues in buying FPGAs) is probably low enough to shove a lot of people out altogether. Casual miners in particular -- people who would otherwise only use their graphics cards for gaming, will probably notice that even with reasonable electricity rates (~$.11/KWh) would be losing a significant amount mining BTC. I'd think it reasonable to assume difficulty will drop "a bit" (10-20% within a month of block reward halving), so I very much doubt the revenues from mining will effectively halve when block reward drops.

http://en.wikipedia.org/wiki/Electricity_pricing#Price_comparison

Iran, Pakistan, Iceland and Ukraine looks like they have it for cheap. Out of those, I'd say Iceland must be the most suitable for a large-scale mining operation. Cold weather year-round, cheap electricity, stable country.

The difference I was alluding to is that difficulty changes don't affect supply.

Difficulty = 1 or Difficulty =1 million or Difficulty = eleventy quadrillion supply is still 50 * 6 * 24 = 7200 BTC per day.

50% drop in supply rate does mean miners make less in BTC terms but there is also less new supply making it to exchanges which should be bullish to prices.

Given the choice of difficulty doubling OR reward being cut in half I would take the later anyday.

There is no poll but there is a thread.

Power in US can range from $0.20 per kWh down to about $0.05 per kWh.  I think the DOE says the average is  $0.12 per kWh.

If you were going to create a co-location warehouse I would imagine the Northwest would be a good spot.  Some areas have cheap power and they also have mild summers, and low risk of natural disasters (would suck to have a tornado rip the roof off your warehouse and eat $100K in rigs).

I live in Parksville, British Columbia.  Our electricity is from Hydroelectric dams in very sustainable locations (those areas of Vancouver Island receive precipitation measured in meters/year) which makes our rates very low.  The first 1332 kWh are $0.0662CAD/kWh above that is $0.0962CAD/kWh.

Our local economy is based on Retirement income and tourism.  There are a lot of empty warehouse spaces with rates as low as $5/sqft.  Internet is available for around $50/month.  I would even consider renting some of my garage space or rack space in my server/utility room.

I would be interested in building some Gigahashes and providing any support I can.  My job is designing electronics (Schematic Capture and PCB Layout) for the Aviation and Oilfield industries.  I have two Radeon 6870s and plan on expanding into FPGA with a Butterfly Labs Single.

If there is serious talk then some investment may be on the way. It might be hard to get something like this passed on kickstarter but I don't think it would be impossible, just my opinion.

ELT

Why Kickstarter, why not GLBSE? Just curious... (And interested...)

+1, GLBSE is a much more practical way to raise funds.

Kickstarter is limited to only creative project.  Indiegogo might be an effective way of raising funds (with credit cards) to buy equipment to generate bitcoin.

I think GLBSE is still too confusing to be usable.  Hopefully the rumored upcoming 2.0 will be clearer. 

Iceland would be interesting as there is a severe currency exchange restriction in place (around $3000/yr when I last read about it).  Might be ok as a limit for John Doe but for multinational corporations it bites.

If you can find someone who will shop for you in Sweden, shipping stuff to Iceland from there is quite cheap.

@Skayl

Here is a link to commercial properties available on the Real Estate board in Parksville.

http://www.icx.ca/map.aspx?&vs=VeSearchAll_2&area=parksville+bc&trt=3&minp=0&maxp=0&minr=0&maxr=0#pmin:0;pmax:0;forsale:false;forrent:true;orderBy:A;sortBy:1;mapZ:12;page:1;mapC:49.3307158250942, -124.289016723632;curView:0; (http://www.icx.ca/map.aspx?&vs=VeSearchAll_2&area=parksville+bc&trt=3&minp=0&maxp=0&minr=0&maxr=0#pmin:0;pmax:0;forsale:false;forrent:true;orderBy:A;sortBy:1;mapZ:12;page:1;mapC:49.3307158250942, -124.289016723632;curView:0;)

My house runs on an electric heat pump so all of the heat from my mining rig is conserved as heat for my home.  In Parksville our climate is very mild.  Winter temperatures are typically +5C to -10C and summer temperatures are between +20C and +30C so there is very little demand on my Air Conditioner in the summer and I have a wood stove for the really cold days. 

Home based businesses are encouraged here. My girlfriend runs a speciality cake business from a 20'x20' workshop in our backyard that we have converted into a pastry studio.  I could set something up in my workshop or in the server room.

I think Skayl is right about subletting, the overhead cost of administration would be much higher running a business from scratch, slicing the razor margins to the max.

@models What kind of model would you need? Could you give more description? Thanks!

Well I personally think this is an amazing idea, if we could get a large amount of mini rig's together we might just have something. In Ohio we get about 0.07 per kilowatt hour :( which from what i hear is better than most states. This is an idea we need to explore. I personally think kickstarter would be a great idea, the only thing is they state you can't use it to start a company. So Maybe we could make it sound more like a never ending operation, which it is. Ideas?

How about build a "almost free" mining data center? I knew a guy who can build wind turbines with fairly low costs in my country. His design could producing up to 650 kw·h per month per turbine by the report.

The point is: with appropriate seed/VC funds for the further RD and mass production, "almost free" mining operation could be possible.

I am looking at doing a colocation here in KC for my miners, especially when I get more.   I am going to put them in the underground caves. Cool steady temps and cheap power.    It is .04/kwhr.   Can't beat that price unless you live near a dam. 

If you are serious about this please contact me. I won't be able to invest much, but some is better then nothing.