Can someone help explain bitcoin mining to me?

[e_howard224]

From what I understand, there are a limited amount of bitcoins to be mined out there and they are getting smaller at an exponential rate. So won't the whole mining business fail? Or do the bitcoins get circulated back around so they can be mined again? Another thing I don't understand is the difficulty level. Will that ever decrease? Or is just going to continue to rise until you need a thousand dollar machine to get any sizable profit from mining?

This is really confusing. I just ordered two 1.6-2.2 GH (for $50 each) mining usbs and according to some calculators I'll get around 20 bucks the first month, and continue to get half less each month until I'm getting nothing. Is that true? And if so, will the mining "market" ever improve so that my profits will increase again. Or should I back out now since its pretty much useless at this point? man this stuffs confusing

[Lauda]

http://www.weusecoins.com/en/
https://en.bitcoin.it/wiki/Mining
There we go.

Now to answer your questions. No the mining business will not fail, eventually the miners will live off of the network fees. The difficulty level can go down if the total hashrate is decreased.
That's your mistake. You most likely will never profit from those devices, unless we see another spike in price.

[donate2me]

mining is a complete waste of time and money!  You are better off throwing them in the garbage and save your electricity.  Mining is a big ponzi scheme.  the computers cost more than what they will ever ROI!  If anything buy bitcoin....  not right now but maybe when its at 100 per coin.

[Laosai]

Go for cloud mining , theres another thread about cloud mining here .

[hostmaster]

Minig is making effort to calculate needed matmemaical calculations for bitcoin in exchange for it you receive some Bitcoins

[donate2me]

yes, you are solving a mathematical equation to earn bitcoins, but due to the greediness of companies such as Cointerra, KNC, and Butterfly Labs you will never have a chance to earn a fraction of what they are earning.  Check out this guy:  http://eligius.st/~wizkid057/newstats/userstats.php/1A73ExsM2doRwTLp82rv5U36QHbBFmHD1X .  They are hashing with 900+ TH.  Yep you got it thats TH.  His computer is 1000x faster that your usb miners.   I like you once was interested in mining.  However after months of research and reading dozens of horror stories about ASIC suppliers delivering late, or not at all, i can tell you save your time and money either buy bitcoin or just save it for your kids college fund.

[jongameson]

mining is a complete waste of time and money!  You are better off throwing them in the garbage and save your electricity.  Mining is a big ponzi scheme.  the computers cost more than what they will ever ROI!  If anything buy bitcoin....  not right now but maybe when its at 100 per coin.

right cause bitcoin will never go up

[Mrrr]

Well, the 0.035 bitcoin you'll mine next month might of course appreciate in value over the course of that month. So if BTC were to rise in value again you could still ROI. Apart from that, the network needs people like you to keep it healthy. So why not have 1 miner for the money and 1 miner for the cause

[Jay-c]

I spent a fair bit of time researching how to go about mining as a complete newbie. I just don't think there are many ways to make it profitable, especially if you're spending less than a couple of hundred dollars.

Some of the larger rigs can be profitable, but even using the calculators doesn't give you (IMO) a realistic degree of earnings.

I looked into buying a BFL Monarch (when they eventually ship.........) and it looks like it could return an investment, but I am lucky in that I have no power costs (don't ask..).

Trading BTC like forex is the most profitable use I've found so far. That's just what works for me, other things work for other people.

[Lauda]

mining is a complete waste of time and money!  You are better off throwing them in the garbage and save your electricity.  Mining is a big ponzi scheme.  the computers cost more than what they will ever ROI!  If anything buy bitcoin....  not right now but maybe when its at 100 per coin.

Stop spreading FUD you ignorant being.
ASICs mine Bitcoin, not computers (GPUs).
Mining with GPUs is very profitable with a ROI time of 40-90 days. Mining Bitcoin is so-so, you might ROI and you might not.
Just support the network, stop being a greedy human.

[DieJohnny]

Bitcoin mining 101:

1. waste time on internet shopping for miners
2. Make bad decision and buy miner on ebay, amazon, or worse from some manufacturer
3. Wait to receive miner while the value of your miner plummets and bitcoin difficulty raises exponentially every day
4. plug in miner and start mining coins at the rate of .00001 bitcoin per day
5. after 30 days add up the $3 you made and calculate how long it will take to pay off your overpriced miner
6. list miner on ebay so you can sell immediately as the price for your miner is now 25% of what you paid
7. begrudgingly pay ebay 10% of sales price
8. invest remaining money in buying bitcoin
9. repeat every six months

[bitcoiner49er]

How NOT to mine Bitcoin 101:

1. waste time on internet shopping for miners
2. Make bad decision and buy miner on ebay, amazon, or worse from some manufacturer
3. Wait to receive miner while the value of your miner plummets and bitcoin difficulty raises exponentially every day
4. plug in miner and start mining coins at the rate of .00001 bitcoin per day
5. after 30 days add up the $3 you made and calculate how long it will take to pay off your overpriced miner
6. list miner on ebay so you can sell immediately as the price for your miner is now 25% of what you paid
7. begrudgingly pay ebay 10% of sales price
8. invest remaining money in buying bitcoin
9. repeat every six months

FTFY.

Learn how the blockchain adjusts difficulty and make your own spreadsheet to SWAG what the future holds. Over estimate and compare with AVAILABLE miners (NO pre-orders). If you find a miner that meets your predictions, go for it. I've been able to find them despite the many others that are too expensive.

[DieJohnny]

How NOT to mine Bitcoin 101:

1. waste time on internet shopping for miners
2. Make bad decision and buy miner on ebay, amazon, or worse from some manufacturer
3. Wait to receive miner while the value of your miner plummets and bitcoin difficulty raises exponentially every day
4. plug in miner and start mining coins at the rate of .00001 bitcoin per day
5. after 30 days add up the $3 you made and calculate how long it will take to pay off your overpriced miner
6. list miner on ebay so you can sell immediately as the price for your miner is now 25% of what you paid
7. begrudgingly pay ebay 10% of sales price
8. invest remaining money in buying bitcoin
9. repeat every six months

FTFY.

Learn how the blockchain adjusts difficulty and make your own spreadsheet to SWAG what the future holds. Over estimate and compare with AVAILABLE miners (NO pre-orders). If you find a miner that meets your predictions, go for it. I've been able to find them despite the many others that are too expensive.

For me to try mining again this is what I would need:

1. Be able to mine at least 10 BTC a month initially, anything less and I just don't really care, I am not interested in watching paint dry.
2. An ROI of no more than 30 days. I just don't think I would trust any difficulty estimate that is more than that far away as so many insane miners are allegedly coming online every week.
3. Hardware I can buy today and express ship to my house so I can be mining in two days
4. Trusted hardware

I just don't think you can get all of the above right now but I stopped looking at hardware a month ago...