Bitcoin Forum

Disregard this post...  My calculations are wrong

show your work.

when will it happen?

In a couple of hours.

mining will ALWAYS be profitable, in the long term. once it becomes unprofitable, people will drop out, causing the difficultly to decrease, which will make it profitable again.

oh, how big will it be?

Well its going to be pretty soon. Check out bitcoincharts.com

about 90% increase in diff...good bye all

There's nothing wrong with your calculation, as long as you ignore the fact that you misplaced the decimal point and it's actually 2.8 BTC = $20.9, or ten times the electricity cost.

(and your stated difficulty is more than the bitcoincharts estimate).

Mining is insanely profitable and will remain so for a while, get used to it.

eh.  my miners are all paid for.

2.1 Gh/s.

so it'll take me about four days of mining a month to pay my electrical bill, instead of the two days that it's taking now.

< shrug >  i'm running 'em 'til they break.

Nice circular logic you have going there.

Playing the lottery isn't close to profitable yet it doesn't stop people from sinking billions into it every year.

The increase will not be anywhere near 90%. It is currently estimated at 71% with 357 blocks left to go. I expect the number to go up some more, but nowhere near 90%.

i'm paying about $100/mo over and above my normal electric bill for the miners.  getting about 7-7.5 BTC/day.

n.b.:  i haven't turned on the AC yet...

Just gonna put this out there...2x5870 + 1x5970 will get you more than 1390 mH/sec as well (and of course, as pointed out by another post, you're going to make way more than 0.28 per day @ 420k difficulty).

2x5870 = 420 + 420 (easily achievable, done so on 10 out of 10 5870s) = 840
1x5970 = 330 + 330 (easily achievable) = 660
840 + 660 = 1500 mH/sec.

1500 mH/sec @ 420k difficulty = 3.29 BTC/day x $7 = $23.03/day.

If this is true, then why would anyone drop out when it becomes unprofitable? And if nobody drops out when it becomes unprofitable, it won't become profitable again.

My prediction is that buying and operating a dedicated Bitcoin mining rig  will tend toward slightly less than break-even in the long run because of competition against:

a) people who get electricity for free (college dorm dwellers, parents' basement dwellers)
b) people who have high-end graphics cards for their own video game amusement, who also use them on the side for mining. These people only care about post-hardware-purchase profits, not pre-purchase profits.

I'm paying $0,18 per kilowatt hour. Four days work for the monthly bill (A/C included) at current difficulty. Even at 100% difficulty rise - still quite profitable  ::) Miners are payed for long ago.

As Jaime Frontero said:

People will drop out because it takes more money to mine than to buy. Anyone who mines at a loss is insane.

correct.

your wattage cost is calculated wrong for some reason, it should be 0.899 x 0.055 per kwh x 24 = $1.18668 a day on power (mining income still nearly 100% of power cost)

here is my stats :

2x 550w Coolermaster GX psu (binded/chained)
4x HD5850 @ 1100/1250 1.275v pulling full load 220watt per card so thats total 880watt
MSI 890FXA-GD70
AMD Sempron 145 underclocked from 2.8ghz to 1.4ghz @ ~30watt

Total full load as read from kill-a-watt is 1050watt for the whole system which equals 1.05 kwh @ 0.072c (avg out peak/offpeak to be conservative with calculations)

So I am hashing at 420mhash/s per card totalling 1680mhash/s for total power usage of 1.05 kwh comes down to the following net gain:


Revenue per time frame: 842.01 USD
Revenue minus power costs: 786.78 USD (this is taken on a monthly run at next difficulty, so if you want to be a prune half this if you want to make up for extra difficulty increases)
Hardware break even: 0 seconds (allready paid for)
Net profit first time frame: 786.78 USD (this is a gain not a loss, and a hefty one for just 4cards)

uh oh, I just showed you 1680mhash/s on a single mining rig.

If you arnt profitable, you didnt do your homework.

shhh, don't tell everyone !!  we want people to stop !!  LOL

...with an addendum.

c) people like me, and Shades (above), who have paid-off miners, and whose mining costs are only electricity and maintenance.

Not quite. Take me for example, I'm paying 0.21 EUR per kwh, and that's about $0.30. So it depends mainly on your energy costs (also: hardware) wheter or not it will always be profitable for you. The guys with bad hardware efficiency (think CPU miners) are going to drop out earlier, as as well I will because of the high eur/kwh costs.

If you have low costs and efficient hardware, your statement might be true. But certainly not for everyone (unless I'm moving to the US, but that's not gonna happen).

I totally missed that point, uh yeh mining is done its time to trade or accept BTC at shops.

NO one can make profit anymore from mining, its a net loss, uh yes confirmed by governator.

Wow, $0.30 per kwh , where do you guys get your power from? Collection of A-grade call girls generating electricity from washing lines? :P

Also Botnets and jscript Miners will always be profitable.

the mining market will reach an equilibrium being a nearly perfectly competitive market

No these OCN kiddos are not insane. They will run at a loss because their mommy+daddy are paying for their gaming rigs and all that. Just see how many people give free cpu time to NSA botnets like F@H for FREE. If they get ANY btc they will mine just for ePeen and bragging rights.

Only fools believe that "once mining becomes unprofitable, people will drop out causing difficulty to fall and mining to be profitable again" !!!

Also only fools believe that "as difficulty rises the price rises" !!!

The cat is already long out of the bag and mining will NOT be profitable any time soon and the price will fall because it only has risen to 7.26 due to extreme speculation.

I expect it to level off near the price of making it ( electricity ) or about $0.25.

What amazes me is how fast Greed came into play regarding bitcoins.

I still find it fascinating and amazing that BTC=$ and here are people complaining about profitability and market scamming and god knows what else.

No one asked you to bitcoin mine, no one asked you to be a part of this forum however everyone is welcome and shouldnt take anything for granted.

This is very true.

I've been amazed at the money and effort the folding guys put into the hobby for a long time. Putting up the biggest numbers on your team or being prominent in the community by way of production is a huge deal for them.

I once joined a folding team and ran a new cabinet full of top of the line blades for several days. It was enough to rank 2nd in daily output among a team of hundreds. I became a minor forum celebrity from it.

I didn't do anything smart, I wasn't nice or particularly friendly or charitable.

It's ridiculous.

I have no idea what point you're trying to make here.

An obvious point, bitcoin isnt just about mining and people should start to consider that now even while mining is still profitable.

Its related to these posts where people feel they are entitled to $XYZ if they buy $123 of hardware for their bitcoin mining rigs.

Next:
~26 May 22:00 UTC difficulty up to ~72%

I thought difficulty was supposed to rise once every two weeks, or twice a month.

Didn't it just rise like 6 days ago ?

It rises every 2016 blocks. If 2016 blocks come sooner than in 14 days, it will be sooner. Actually the difficulty increase=14/days_for_the_last_2106_block_since_retarget so for a 70% increase, the retarget will come in about 8 days since the last one.

Maybe I missed it but, I don't recall seeing anyone claim entitlement. They're expecting, possibly gambling on a particular return but that's it.

The "Bitcoin isn't just about mining!" mantra, while certainly correct in a sense, is just silly.  Mining is profitable, easy and the sense that it's creating "free money" is the captivating point that fuels continued growth.

Demanding that everyone take some altruistic or academic stance on the future or health of Bitcoin is a waste of breath and potentially quite hypocritical.

I was thinking about getting 2 5830s to throw into a spare PC, and keep that running 24/7.


Worth it after this next difficulty increase?

My only cost would be the cards, ~200 usd.

yeah and two weeks later $14/day
month later  $9/day
and so on :)

if the network keeps growing with this speed we'll need a quantum pc in a year or so ;)

If we continue to see 50% or greater increases - it won't even pay back your electricity rates (even if you own your hardware outright) in about 60-90 days. If we continue to see the 70%+ difficulties that time frame goes down to 30-60 days.

At this point - the only support bitcoin will have for processing will be transaction fees and kids running from free electricity with their gaming rigs in their dorms/parents basement.

Anyone with a hint of clue that's trying to support/expand an operation from mining revenue will simply leave the game. Some of those will be temporary waiting for the difficulty to drop in hopes that all is not lost. Others for good.

It will be interesting to see what happens to both the network hash rate and bitcoin exchange values then!

(I should note this assume a BTC/USD exchange rate of $7USD per BTC and .09 KWh)

I dont come here complaining about how "Its to difficult" to mine expecting something to change so I can have an better chance of mining.

The concept of difficulty increasing and mining getting more complicated and less profitable is what I want OP's like that of this thread to understand. I wont disagree with the point that bitcoinmining is profitable and holds alot of value(right now) but it helps nothing for continued growth of the bitcoin currency if majority of people strongly believe the concept ends once bitcoing mining stops being profitable.

Slowly but surely reading some of the new threads popping up I can gauge that is exactly what new "growthees" expect and those of us who know better should educate them on the other long term values of the bitcoin currency.



The above plays well into my original explaination, if we dont get new users who joined the party late interested in alternative methods to use bitcoins and still see it for having value then we might see a huge downswing of activity as soon as difficulty spike above a certain threshold which is fast approaching.

I am not against the difficulty increase as it acts like an digital accounting of some sort balancing the books of the ecurrency company but it would become a miserable time to mine if the mining community end up being the only people interested in buying/selling coins for whatever reason without any participation of all the just-laid-off bitcoin miners.

Not really, this is a known-known.  The difficulty follows the price; when the price rallies, miners join the fray; and when the price falls, borderline miners drop out first.  It's a self-balancing system.  Feel free to stand around and not participate, however.  That's what I did, and I'm not bitter about missing the rally from 1.4 cents to 6.5 cents before I bought in!

Why is it our responsibility?  They should know how to research and read, or at least know how to ask a civilized question before chiming in about they alone can see the great Bitcoin flaw (tm).  If Bitcoin requires that everyone understand how it works in order to be adopted, it's already a failure.  But the facts are that the vast majority of people don't know or care how fiat currencies work, either.  When Bitcoin hits the mainstream, most people won't really care how Bitcoin works.  They will simply trust their geeky friend that it does work, and start using it little by little. 

I honestly dont care if they continue to run bitcoin mining or not, I do however believe that the bitcoin "community" is losing out on alot of "new customers" by giving out the vibe that its a "free for all - money fountain" and once that "fountain" dries out then bitcoin cease to exit(thats how alot of people seem to perceive it)

I think something must be done to correct that, I dont have the fast solution other than correcting misconceptions in threads like these.

The future is an unknown. In order for the bitcoin price to follow difficulty - assuming 50% increases we would have to see a BTC/USD conversion of ~$20USD per BTC in 3 months. Which signals me to buy bitcoins rather then mine.

Sure it's simple supply and demand - but with the finite number of bitcoins that have been mined in active circulation - we don't have what you could call a healthy economy.

Those that point out merchants are needed are right. We need to derive a value from these coins other then mining value (which basically pins the currency to hardware/electricity costs along with the hopes/dreams of those buying the coins as an investment).

My point in the prior post is that we are hitting a critical crossroads where the seemingly rapid adoption/growth will come to a halt.

Being p2p, I agree that there needs to be an incentive to run nodes - but that incentive should come from places other then pure profit. IDEAS are the hardest thing to kill once they get going - unfortunately the bitcoin IDEA represented in these forums seems to be PROFIT.

If the system continues to exist as such, there is a good chance that it will simply written off to world history. Currency is medium of exchange, generally not an investment.  I advise anyone wishing to see this project survive to invest in companies using bitcoins (purchasing or otherwise), don't invest in bitcoins themselves.

at least i can cheaply collect RMA'ed GPU's for my museum, after mining Boom/madness falloff :P

All good points.

The problem I see is that there's an awful lot of "should" in the bitcoin community. I'd wager most of that should is borne from hopes of profit just the same.

Lots of people with some amount of bitcoin holdings have bright ideas about what others should do in order to stabilize and legitimize said bitcoin holdings.

How many of these people are actually spending with bitcoin shops rather than simply hoarding or cashing out each day? Better yet, how many people would be willing to patronize a bitcoin business that offers the equivalent of a poor exchange rate in order to promote acceptance?

Over 1,000,000 bitcoins have traded on MtGox in the past 30 days. I'd say that's a very healthy amount of circulation on a single exchange. That doesn't count all the other OTC/business/etc trades that are also going on.

God bless Canada and its cheap electricity :D ! I pay max $0.07 per KwH

I said its gonna be 100% increase...people doubted me...now you see  :-*

*sigh* I gotta throw more GPU power to maintain the same income now..yay for difficulty increases..

Even assuming that miners behave in a purely rational profit-seeking way, this statement is only true in a weak sense. What you should write is, "Mining will always be profitable, given that you possess hardware near the current top of the line in terms of mining efficiency." It's certainly not obvious that mining with a GPU will always be profitable, and even less obvious that buying a GPU to mine will always be profitable.

If you're trying to imply that current hobbyist miners have nothing to worry about, you're off the mark.

then please stop mining

Mining will always be profitable, if you have already paid for your hardware and need to heat your space anyway.  Once again, anyone who lives in Iceland probably cannot be undercut by any miner who lives in Florida.

True. Iceland could so own this mining market if they wanted to. Cheap and plentiful geothermal energy!

And no other way to effectively export that energy to Europe where it's really needed.

Actually, it could hover around net neutral and only if people mine based on pure logic [mine only because it is profitable].  Many people may mine when it isn't profitable for them, because they think it is cool, they didn't bother to calculate their true costs or anticipate a long term appreciation of their minted coins. 

I think [and hope] what this will do is stop people from recklessly buying hardware to mine as it simple increases the difficulty and in a relatively short amount of time neutralizes their investment.  Those at the bottom of the hash rate contribution will probably be forced out due to a lack of any return at all due to people like this [meaning they didn't think it through and destroyed it for others while not making anything more than short term gains on their investment that probably requires long-term to payoff].

I have seen posts here for people wiling to drop $10K on multiple rigs with no real idea how the bitcoin economy works or how they are going to earn that money back.  These people are who I fear most as it takes mining out of reach of the smaller miner just using a single GPU [even a high quality one] to make any significant profit at all.  The same people that cause this will themselves lose as difficulty adjusts.  In the end, the economy will win and BTC/hr will hover around 6 and those monster rigs are going to be energy hungry machines, often accumulating interest owed on their credit cards.  There will always be big miners and and small miners as it should be [until all the coins are minted anyway].  I just fear that those with big pocket books and in some cases, lack of forethought may take the fun of this venture away from the average miner.

In case it isn't obvious, but once a new piece of hardware comes out that significantly increases MH/s [per watt], there will be another run on difficulty even if it levels out for a time.  Further, it will make the newer leading edge GPUs out of reach in cost for gamers as long as AMD GPUs are the mining hardware of choice.  The sad thing is that I like to game, but I prefer NVidia gaming hardware for it's stability, features, and, perhaps most of all, their high quality drivers [I still can't watch a video of any kind while mining on this machine until they fix the driver .... worked just fine with latest generation NVidia hardware drivers].  I let ATI (AMD) go in 2007 for these reasons and the fact that the hardware just didn't perform as well and was over priced .... and bitcoin has not done much to change that and a lot to hurt that.

In the future, hobbyists will have more powerful computers, so I think it will be true for a long time that hobbyist mining is profitable, just not as profitable as professional mining.

Alright, so I'm a relative noob to the BTC world, but I keep seeing these doom and gloom predictions that mining will become unprofitable and I don't get it.  Yes, the network will increase in difficulty and yes, your rig may not be making as many bitcoins as it once used to, but considering bitcoins will become scarcer, their value should go up and keep it profitable.

I could be completely off base, but you can see the same thing happening in the real world.  Oil, gold, etc., as it get's harder to 'mine' something and you need ever more expensive equipment to do it, the item will be worth more when you do get it.

I know this is an overly simplistic view of things, but at some point, you will need to buy more expensive equipment to mine bitcoins.  I'm sure there's a lot of folks that used to CPU mine that had to move to GPU's, and at some point GPU's will be surpassed by the next big jump in mining power, but theoretically, the coins should be worth more, so it should be a wash.

Some people believe that mining will not be profitable, others believe it will. Only time will tell.

For the record, I agree with you.

Great points up until you apparently took a hit of the crack pipe prior to that last paragraph.  Even the kids who popularized the whole "ATI has no drivers!" nonsense have stopped trolling with that by now.

Admittedly, there was a time when ATI was shipping poor drivers but, it's ancient history by now and they certainly never released anything quite as outright dangerous as the 196.75 house fire update (http://www.zdnet.com/blog/hardware/warning-nvidia-19675-drivers-can-kill-your-graphics-card/7551).

Furthermore, ATI cards have only been overpriced in recent years due to a complete lack of competitive product from Nvidia. That's supply and demand, not ATI's fault.

There are people out there, who for various reasons (most because of lack of forethought, but not all) will mine at a loss [meaning hardware maintenance and energy costs will exceed BTC revenue] and it is those people who make it difficult for the smaller miner.  The more there are, the worse the problem for the small guy.  So yes, there is a doom and gloom scenario, but the question is really to what extent it will become or stay a problem.

You absolutely were wrong. The increase was estimated around 72% when you made your 100% prediction and it ended up being closer to 75%. Not 100%.

Sorry, but according to my math 224k -> 434k = about 100% increase [to be precise 94% something something]. Or, are maths in various countries that different?
Now, who's estimate was closer -.-

I was wondering, what could happen if when there are 50 blocks remaining for the next dificulty rise the 70% of the bitcoin network stops mining?

The last 50 blocks take about 4 times as long on average.

The previous difficulty was not 224k. It was 244139. That is a 78% increase.

Yes, and no doubt due to the latency between ordering hardware (when mining appeared more profitable) and getting it online.  Judging by the prices at the usual places I would have to say that such expansion is likely coming to an end for now (maybe another week or two of latency some orders, but I suspect new hardware purchases are dropping dramatically for now).  So, hopefully the next difficulty increases will be relatively moderate and maybe even some retrenchment in a few weeks.  Depends in part on the price of the BTC.  If I were AMD, I would be buying coins to push the price and excite orders and them when they are ready, dump them leaving many stuck with too much hardware, wait for the correction and a new product release and repeat. 

A far as AMD, you have been warned!

ATI is STILL shipping poor drivers, if you're doing anything with OpenGL. Now GPGPU stuff like mining is great.

As I have indicated, since my purchase of the 6970 for gaming and mining, it will lock up 100% of the time if you try to run a video of any kind while mining.  This if true with stock settings and 70 degrees C.  Latest drivers give me enough time to kill a browser if I navigate to a page that starts ui play a video ... probably because I am pushing the card a little harder now giving me done time while the video tries to initialize.  I understand they used to have the same issue with the 58xx and 5970 when they first came out.

No such problems with NVidia ever under any circumstances even with the latest hardware.  Games often have trouble themselves, but that is rarely a driver problem (manufacturers often make tweeks for some games or bugs found from games and also create profiles to help use the card the best for the game).  I have been using gaming cards since before the first TNT cards and used the extra 3Dfx cards and have never seen lockups so predictably and easily as the drivers for the 6970 allow when mining, at least since windows 2000 was released.