Bitcoin Forum

We are doing an article on building a Bitcoin mining rig for under $500, I'd love to hear suggestions along with recommendations of tutorials that walk through the setup.

Also do you think it makes sense to build a rig for this little or do you sacrifice too much by keeping the budget so low?

What are the specs for the rig you intend to write on building?
For under $500, you can get 2 S3's with a combined stock hash-rate of 880 Gh/s @ 720 watts (plug and play!)
Does it make sense ... ? Money sense ...? Makers' sense ... ?

Two S3's with power supply?  From where?

You most certainly won't get 2 S3s for under $500.

To the OP, there are a number of rigs that you can purchase for under your $500 mark.  I'm a bit confused by your statement that you wish to "build" a bitcoin mining rig for under $500.  You aren't building a PC to mine Bitcoin, and if that's what you're asking, you're about a year too late ;).

My take is that the original poster wants to give options on how to start bitcoin mining for under 500 and get the best bang for his buck.  It sounds like he/she wants to put together a "how to" for noobs.

You hit the nail on the head. Trying to put together a good nitro guide for people who want to get started mining for under $500. Thanks in advance for any assistance/advice!

I don't know how to help you with the 500 dollar budget, but I can tell you to make sure that you include in your literature for the user to do their own due diligence. I made mistakes and wasted money that could've been placed in better hardware.

One of my friends recommended buying Antminer U1 and U2's... While being informative and helping me understand what mining was about, buying 20 of them in the 25 usd range was a bad judgement call on my part...  S1's can be bought for under 100 usd now, meaning that you are paying around .50 usd per GH/s.  Obviously you still need to factor in the cost of a PSU.

The OP of this thread is building an info site:

https://bitcointalk.org/index.php?topic=726024.0

His compilation of hardware with their expected earrings at the current difficulty:

http://www.bitcoineval.com/hardware.php

One S3 is most likely your best bet if you have a PSU laying around.  1T is going to he a little higher so far.

 You can buy yourself one of the new Asicminer Tubes for 1.04 bitcoin today.  Granted that is slightly over the $500 mark today but when I purchased mine last week, it was sub $500.  The Tube runs at around 880 GH/s but the real beauty of the tube is that assembly is required (at present) so you really get that sense of accomplishment when you get it up and running. 

 CanaryInTheMine has set up a group buy so that you can buy them individually - https://bitcointalk.org/index.php?topic=735982.0

 Asicminer is currently selling in batches of 10.

 Worth checking out.

full disclosure: I bought a few Tubes and I own a couple Asicminer shares but I am not being paid for the ad in my sig.

Are you planning on building a GPU mining rig? Modern miners only need a Raspberry Pi to run off...

 GPU mining rig for Bitcoin (or even scrypt) is a total waste of your time and money.  Not worth considering.
OP was asking about Bitcoin mining rigs. 

You can buy a paper shredder for $50 and put four hundred dollar bills into it.  It'll come in just under $500.

That was helpful...  I'm not sure how this sarcasm relates to someone trying to get started in mining?

Now that it's been clarified you've got a $500 budget and are looking to get the best bang for the buck, you've pretty much been given the hardware choices.  At present, you can get about 3 S1s and a couple PSUs, or 1 S3 with a PSU, or one of those new tubes (although you're going to be a bit over your $500).  If the $500 is an absolute limit, then you're left with the S1s or the S3.

I don't own one of the tubes, though they are certainly interesting.  I particularly like the "build it yourself" aspect.  I might get one just to play with it :)

The S1 is last-generation tech... using 55nm BM1380 chips that draw about 2W per GH/s.  They were, and still are, workhorses.  Solid and stable, and at present you can probably grab them for about $100.  With your $500 cap, and assuming you've got to purchase everything including PSU, you'll be able to pick up 3 S1s and an EVGA 1300 G2 to power them (or you could pick up a couple Dell Server PSUs with breakout boards).  Overclocked, you're going to get 600GH/s for your $500.

The S3 is Bitmain's latest rig.  It uses the newer BM1382 28nm chip and draws about 0.77W per GH/s.  The later batches are far more predictable and stable, unlike the earlier ones.  I have units from batch 1, batch 4 and batch 5.  The batch 5 units are far more receptive to over clocking.  Some of the batch 1 units do not even hash at the advertised 441GH/s and had to be underclocked to run stable.  At present you're going to have to find a reseller because Bitmain is sold out, and will not be sending the next batch (dubbed S3+) until the 20th of September.  Like the S1, you need an external PSU, so factor that into your costs.  In this scenario, if you get a good unit, you'll get 504GH/s for your $500 with some cash leftover in your pocket.

Who knew that an 0311 could string that many words together and make a coherent thought?  6093 here...   ;D

Semper Fi

Pretty amazing, huh?

Oooh-Rah!  Semper Fi, Devildog! 

 Title 18, Section 333 of the United States Code -
Whoever mutilates, cuts, defaces, disfigures, or perforates, or unites or cements together, or does any other thing to any bank bill, draft, note, or other evidence of debt issued by any national banking association, or Federal Reserve bank, or the Federal Reserve System, with intent to render such bank bill, draft, note, or other evidence of debt unfit to be reissued, shall be fined under this title or imprisoned not more than six months, or both.

 It'll potentially cost you more than $500. 

 I would like to get one of the S3's but I have to do some load shedding first.  Appreciate the info!

Solid answer, thanks for going into detail here. Do you think this setup will turn a profit or be more of a break-even hobby setup?

And as a follow-up to that, what do you think the minimum is that someone needs to spend to really make money mining?

Thanks in advance and I appreciate all the comments everyone else has provided so far as well, great community on here and looking forward to being a more active part of it!

Your followup questions are considerably more difficult to answer than your original query.  The primary reason is that there are way too many variables involved, and a whole lot of guesswork in providing values for those variables.  The biggest, and also most unpredictable, of the variables is the change in difficulty for solving blocks.  In the simplest terms, as the total network hashing rate increases, difficulty increases.  The difficulty is recalculated every 2016 blocks, and is used as a control to attempt to keep the block generation at 10 minutes.

Of course, the entire process of mining is nothing more than brute-forcing efforts at finding the right hash to solve the block.  As such, it is entirely luck based.  In other words, I have just as much chance of finding that solution on my first submitted share as I do on my hundred billionth submitted share.  All we can solve for is the expected time to find that block, and the formula for doing so is as follows:
So, to figure out our expected earnings per day, all we have to do is tweak that formula a little bit:
This is the basis for every online calculator out there.  Let's give a real-world example using the S3:
This tells us that in a perfect world, that S3 would expect to earn us 0.00930125BTC per day.  As you can also see, changes in the difficulty value are directly proportional to your expected earnings.  In other words, you increase the difficulty by 10%, your earnings will decrease by 10%.

If you look at the first formula I posted, you'll see exactly how the network adjusts the difficulty - it knows the hash rate and sets the time to solve the block at 10 minutes (600 seconds) and solves for difficulty.  Another thing to point out here is that the network really has no concept of actual hash rate.  There is no central repository to which every single miner on the planet reports their individual hash rate.  All the network knows is how long it took to solve a block.  Just like it uses that same formula to calculate the difficulty, it also uses it to calculate the hash rate.  It knows the time stamp of the previous block.  It knows the difficulty.  Therefore, it solves for hash rate.

Now that I've explained how the network operates, hopefully you can see the unpredictability inherent in it.  If not, then just fall back to my original statement that as hash rate rises, difficulty goes up :).  By the way, to all you purists out there, yes I realize it's a poisson distribution, but I'm trying to keep this at least moderately simple.  If you want to see some really nicely done explanations of things, I suggest you read here: http://hashingit.com.  Davejh has done a great job with his articles, and I highly recommend them.

Alright, so back to your questions of profitability.  The answers truly depend on you.  Do you think the network difficulty is going to increase by leaps and bounds, averaging 25% per jump?  If yes, then purchasing hardware is a losing proposition, even if you have completely free power.  If you think the difficulty will average 10% per jump, then you'll see an ROI after 85 days or so assuming free power.  No free power?  At $0.10 per kWh that 85 day ROI just turned into 138.  By the way, all of these are based on the assumption that you're going to plug that S3 in today.  The longer it takes to get it mining, the more the profitability changes.  For example, let's say you don't get it for 21 days, using that same 10% jump with $0.10 per kWh power, you're never going to make a profit.

I know this has been a long reply, and I hope it helps to give you a better understanding.