Essay: A Guide to Mining in 2013
By: Proper_proper
This is an essay. An essay for all seasons.
Welcome to bitcointalk.org, the go-to place for all things bitcoin. In this essay I will cover the best ways you can mine bitcoins. Why would you want to mine bitcoins? The idea is of course to make money, no pun intended. While there are many reasons to mine including promoting a robust bitcoin network, the best one is the money. And there is still a lot of money left to be made mining. Here's what you need to know.
First, you need to know what mining really is. Mining is a promise to buy bitcoins in the future. Think of mining hardware as a bond. Something which you buy, and which in turn pays back a certain amount of money to you at a fixed rate. This rate is variable. Some bonds pay out each year, some pay out each quarter, and some pay out each month. Still some bonds pay more or less often than that. So mining hardware is bought at a fixed price just like a bond, and mining hardware pays out at a variable rate as you mine coins with it. This is not the same as buying coins because you need to think about stuff like the cost of power, or mining difficulty. The takeaway is, you need to know how to keep long term costs down.
Power (electrity) costs are controlled by class of hardware. This is because class of hardware affects all of the other variables. When you mine with a GPU (a video card) your electricity cost is very expensive because it must support the rest of the computer too. Plus, the GPU itself is not as good for mining compared to a FPGA. FPGA units used for bitcoin mining use one tenth the power of a GPU. It's true that they cost more, but with power costs up these days it is good to know. If you're planning on serious mining and you leave a computer turned on 24 hours a day, 7 days a week it will cost more than $100 per month. At the end of the day, running a couple video cards versus a FPGA unit is likely to cost more than the computer (and forget the video cards)! Mining with a GPU is great if you're just starting out, but we have now passed the point where buying a rig just to mine is going to be a waste of money.
ASIC units are even better than FPGA. If you're looking out six months or a year you will save even more money. So much so that it may not be worth getting into FPGA mining "now". If you are serious about making money mining, do not buy FPGA units "now". You will end up making less money than waiting and buying ASIC units when they ship in a couple of months.
The only long term cost you will face is power. Now that you know about that, you should think about cost per mHash (or cost per gHash). Here is what you need to know:
1. BTCFPGA's bASIC-72 $1069.99/72 = $14.86 /gHash
2. BTCFPGA's bASIC-36 $599.99/36 = $16.66 /gHash
3. Avalon ASIC $1299.99/66 = $19.70 /gHash
4. BFL MiniRig 'SC' = $29899/1500 = $19.93 /gHash
5. BFL Jalapeno $149/4.5 = $33.11 /gHash
6. BFL "little" Single SC = $649/30 = $21.63 /gHash
7. BFL Single 'SC' $1299/60ghash = $21.65 /gHash
(Note: No ASIC units are shipping yet. Buyer beware of fraudulent ASIC order takers. For maximum safety do not pre order any ASIC product.)
This is just a quick look at three companies. There are many more. This does not mean you should run out and only buy #1 on this list. Competition is strong and no one is shipping yet. But you need to understand what is going on compared to the previous generation FPGA designs.
1. BFL FPGA Single: $599/0.832 = $720 /gHash
2. Enterpoint's Cairnsmore1 "Quad XC6SLX150" Board - $640/0.880 = $727.27 /gHash
3. BTCFPGA ModMiner Quad $1069.99/0.840 = $1273.80 /gHash
See here, even the cheapest FPGA boards are 33 times more expensive than ASIC! And ASIC units use just a fraction of the electricity that FPGA does. It's easy to see where FPGA units will be going once ASICs hit the market: into the garbage! In short, there is no other option if you are interested in profitable mining other than to buy an ASIC product.
Then what should you buy? We once again return to the comparison between a bond and mining hardware. If you buy hardware, you will have to buy the whole thing yourself. On the other hand, you may be interested in buying a mining bond. But if you do, be careful that you are not buying into someone who is trying to dump their FPGA (or worse, GPU) units on you. Make sure that you only invest in high quality ASIC mining bonds that do not mine with GPUs or any FPGA units. The best place to invest in mining is on BTC-TC (
http://btct.co). It is a bitcoin exchange that allows you to buy a mining bond in a mining company. You don't have to spend $29,899 for a 1,500 tera hash ASIC mining rig. You can spend one bitcoin or less on a mining bond that represents one share in that hardware and get about the same return.
In conclusion, it does not matter if you choose to buy mining hardware or pool your resources with others in a mining bond. The only thing to worry about is buying ASIC products. Steer clear of anything related to FPGA or GPU. ASIC is the only way to fly in 2013.
If you enjoyed this essay please donate some bitcoins to me, Mr. Proper_Proper, at 16dJfNeaKGigaizekhc2d2mxJ5UPqjUPAw. You may check this address to see how much money this story has generated by visiting
http://blockchain.info/address/16dJfNeaKGigaizekhc2d2mxJ5UPqjUPAw. Please mine responsibly.
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