Bitcoin Mining 101 Just The Basic Facts (2017)

[Flying Hellfish]

1)  CPU and GPU Bitcoin mining is dead, you will never mine anything but dust and will never receive a
     payout from a pool.

2)  Bitcoin difficulty will adjust, meaning so will your income.  Difficulty long term trend has been a steady
     increase for the last few years.  Of course difficulty could drop, it has before, but its rare when it does and
     even more rare is a drop that is meaningful.

3)  Bitcoin miners in general produce significant heat loads and you will have to deal with it one way or
     another.

4)  Bitcoin miners can take significant electrical resources to power them.  You should know 100% if the
     circuits powering your miners are rated for the load you're putting on them.  If you don't you should get
     professional assistance.

5)   Bitcoin miners in general are LOUD! As in vacuum cleaner to hair-dryer loud.  


Thanks to NotFuzzyWarm for #5    

[1714933772]

1714933772

[1714933772]

1714933772

[User365]

2)  Bitcoin difficulty will adjust, meaning so will your income.  Difficulty long term trend has been a steady
     increase for the last few years.  Of course difficulty could drop, it has before, but its rare when it does and
     even more rare is a drop that is meaningful.    

why would it drop? I mean how, difficulty gets more, the more blocks are mined, isn´t it?

[VRobb]

How?  By having > 10minutes per block average during the 2016 blocks generated (number, not year) as below:

Code:

Date 	Difficulty 	Change 	Hash Rate
Jun 04 2017 	678,760,110,083 	13.90% 	4,858,754,124 GH/s
May 23 2017 	595,921,917,085 	6.42% 	4,265,775,241 GH/s
May 10 2017 	559,970,892,891 	7.28% 	4,008,427,786 GH/s
Apr 27 2017 	521,974,519,554 	0.22% 	3,736,439,151 GH/s
Apr 13 2017 	520,808,749,422 	4.24% 	3,728,094,244 GH/s
Mar 30 2017 	499,635,929,817 	5.03% 	3,576,533,297 GH/s
Mar 17 2017 	475,705,205,062 	3.24% 	3,405,230,497 GH/s
Mar 03 2017 	460,769,358,091 	4.54% 	3,298,315,540 GH/s
Feb 18 2017 	440,779,902,287 	4.41% 	3,155,225,442 GH/s
Feb 04 2017 	422,170,566,884 	7.43% 	3,022,014,630 GH/s
Jan 22 2017 	392,963,262,344 	16.64% 	2,812,940,600 GH/s
Jan 10 2017 	336,899,932,796 	6.05% 	2,411,623,656 GH/s
Dec 28 2016 	317,688,400,354 	2.43% 	2,274,102,150 GH/s
Dec 15 2016 	310,153,855,703 	8.16% 	2,220,167,778 GH/s
Dec 02 2016 	286,765,766,821 	1.76% 	2,052,749,317 GH/s
Nov 18 2016 	281,800,917,193 	10.68% 	2,017,209,539 GH/s
Nov 05 2016 	254,620,187,304 	0.40% 	1,822,642,296 GH/s
Oct 22 2016 	253,618,246,641 	-1.90% 	1,815,470,125 GH/s
Oct 08 2016 	258,522,748,405 	7.17% 	1,850,577,916 GH/s
Sep 25 2016 	241,227,200,230 	6.82% 	1,726,771,560 GH/s
Sep 12 2016 	225,832,872,179 	2.30% 	1,616,574,667 GH/s
Aug 29 2016 	220,755,908,330 	1.56% 	1,580,232,344 GH/s
Aug 15 2016 	217,375,482,757 	7.67% 	1,556,034,316 GH/s
Aug 02 2016 	201,893,210,853 	-5.43% 	1,445,207,896 GH/s
Jul 18 2016 	213,492,501,108 	0.04% 	1,528,238,850 GH/s
Jul 04 2016 	213,398,925,331 	1.88% 	1,527,569,009 GH/s
Jun 21 2016 	209,453,158,595 	6.83% 	1,499,324,110 GH/s
Jun 08 2016 	196,061,423,940 	-1.63% 	1,403,462,340 GH/s
May 24 2016 	199,312,067,531 	2.60% 	1,426,731,353 GH/s
May 11 2016 	194,254,820,283 	8.73% 	1,390,530,167 GH/s
Apr 28 2016 	178,659,257,773 	-0.01% 	1,278,892,782 GH/s
Apr 14 2016 	178,678,307,672 	7.09% 	1,279,029,147 GH/s
Apr 01 2016 	166,851,513,283 	0.82% 	1,194,369,655 GH/s
Mar 18 2016 	165,496,835,118 	4.46% 	1,184,672,491 GH/s
Mar 04 2016 	158,427,203,767 	-3.10% 	1,134,066,098 GH/s

There's a few in there with negative diff adjust!  That being said, the long term trend is up, up, and away...!!

[NotFuzzyWarm]

2)  Bitcoin difficulty will adjust, meaning so will your income.  Difficulty long term trend has been a steady
     increase for the last few years.  Of course difficulty could drop, it has before, but its rare when it does and
     even more rare is a drop that is meaningful.    

why would it drop? I mean how, difficulty gets more, the more blocks are mined, isn´t it?

Difficulty is determined by how fast the blocks are found -- not how many blocks have been found.

The network tries to hold an average of 10 minutes per-block. If more/faster miners are hashing and blocks are solved too fast, diff goes up to increase time to solve a block. If the diff correction is too much or miners are taken off line/throttled back (say in summer) and it takes longer than 10 min on average, then the diff goes down.

edit: In addition to the OP's 4 points there is one more that certainly must be in the list:

5) Bitcoin miners are LOUD! This is because the fans run at fairly high speeds to move enough air against high back-pressure to dissipate the 1-1.5kw of heat produced. As in vacuum cleaner to hair-dryer loud. No you cannot change fans to quieter ones -- they cannot move enough air against the back-pressure inside the miners.

[johndoe784r]

4)  Bitcoin miners can take significant electrical resources to power them.  You should know 100% if the
     circuits powering your miners are rated for the load you're putting on them.  If you don't you should get
     professional assistance.       

I am living proof that the above is a good point for all new miners to really focus on! I thought I had it all figured out (cost, return on investment, mining difficulty, the market, etc) then when my S9 came in the mail I discovered that I COULDNT EVEN USE IT!!! The circuitry in my old house couldn't have safely handled the load...

Thankfully a kind person from this very board helped me out with hosting it for me - but new miners please please don't fall into the same trap I did!

Make sure your electrical circuit can handle it - or perhaps lose a lot of money being forced to sell it at a loss and not ever even get to use it......

Just wish I had done a bit more research on circuits before investing.

Lesson LEARNED! Won't ever be making that kind of mistake again 

[jpouza]

Bitcoin mining will became more and more difficult with time, it is really a good point o view what you have listed here, mining btc is headed now for professionals and big companies, also the ASIC mining efficiency must always increase, if not, that would be a huge problem to power those electricity hunger miners.

[Hailey2017]

this is the effect of bitcoin increasing price in the market you guys should pray it will go down for quite a while to make mining function again.

[NotFuzzyWarm]

^^
BTC mining works just fine and as it is designed to. Diff going up is all part of it and not something bad nor unexpected.

Hellfish: Perhaps time to lock this thread before it diverges too far from its '101' theme??

[Flying Hellfish]

^^
Hellfish: Perhaps time to lock this thread before it diverges too far from its '101' theme??

Agreed, I've locked it to keep it clean.  The thread was not meant to discuss the viability of mining but to give basic (think universal) mining info to anyone thinking of starting to mine BTC.  Deciding to mine or not, or if BTC is borked or not all have MANY multiple threads where these can be discussed to death.

I am going to add NFW's #5 to the list. Now that the thread is locked anyone else that has a BASIC rule about mining in 2017 can feel free to PM and if I agree it's a basic rule than I will add it to the list.