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Author Topic: So, what happens when mining for Bitcoins becomes unprofitable?  (Read 3115 times)
XX55XX
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June 22, 2011, 07:03:39 PM
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By my calculations, mining for Bitcoins on my GTX 560 Ti is still profitable... but margins are razor-thin, and with the next difficulty level, there won't be a point, since all Bitcoins will be earned at a slight loss due to the increase in my electric bill.

It'll probably happen within one or two years for those that have AMD cards and significantly more efficient setups. You hit a wall, and realize that you are paying more for electricity than you can earn in Bitcoins.

Won't most miners leave, causing no more Bitcoins to enter the system?
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June 22, 2011, 07:06:21 PM
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Some people will keep mining at a loss because they know the Bitcoins will pay for themselves in the long-term.
Adam
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June 22, 2011, 07:08:23 PM
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Does not compute. That's some Yogi Berra logic right there.

Nobody mines anymore, the difficulty is too high.

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June 22, 2011, 07:09:00 PM
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I'll still mine just the heck of it because I like the political statement behind Bitcoins.

1NwGKiLcAngD1KiCCivxT6EDJmyXMGqM9q

Ask not what Bitcoin can do for you - ask what you can do for Bitcoin.
Meni Rosenfeld
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June 22, 2011, 07:11:09 PM
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Difficulty depends on the number of miners. If miners leave, difficulty will decrease until mining is profitable again.

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compro01
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June 22, 2011, 07:13:50 PM
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Won't most miners leave, causing no more Bitcoins to enter the system?

the difficulty is not rigged to always rise.  it's not a one way street, though it has only dropped a couple times before.

if the hashing power drops, the difficulty will drop accordingly to try to maintain the 6 blocks/hour rate.
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June 22, 2011, 07:14:43 PM
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Nobody mines anymore, the difficulty is too high.

 Grin

Seriously OP, do you not know the difficulty is adjusted back down if hashing power decreases?

I think the reward halving will be a nasty shock though, if bitcoin makes it till then.
Jaime Frontero
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June 22, 2011, 07:15:44 PM
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Does not compute. That's some Yogi Berra logic right there.

Nobody mines anymore, the difficulty is too high.


there are 10 Thash/sec of miners out there who disagree with you.

i am one of them.

my hardware is paid for, and my electrical costs are currently (with exchange prices at around $15) about four-five days/month.  the rest is profit.
XX55XX
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June 22, 2011, 07:17:20 PM
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Ah, I see.

I am just new to this whole thing, that's all.

I guess I will mine when the difficulty favors my Nvidia hardware.
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June 22, 2011, 07:24:09 PM
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I guess I will mine when the difficulty favors my Nvidia hardware.
Probably never going to happen.

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XX55XX
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June 22, 2011, 07:30:22 PM
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I guess I will mine when the difficulty favors my Nvidia hardware.
Probably never going to happen.

I know. Bitcoin is getting too mainstream and too people are piling their CPUs and GPUs into the game.
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June 22, 2011, 07:35:37 PM
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I guess I will mine when the difficulty favors my Nvidia hardware.
Probably never going to happen.

I know. Bitcoin is getting too mainstream and too people are piling their CPUs and GPUs into the game.

that's not why.

this is why:

https://en.bitcoin.it/wiki/Mining_hardware_comparison
XX55XX
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June 22, 2011, 07:39:20 PM
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I guess I will mine when the difficulty favors my Nvidia hardware.
Probably never going to happen.

I know. Bitcoin is getting too mainstream and too people are piling their CPUs and GPUs into the game.

that's not why.

this is why:

https://en.bitcoin.it/wiki/Mining_hardware_comparison

That too, I suppose. But I'm not going to sell my GTX 560 Ti and swap it for a 6870 just for the sake of "mining" a cryptographic commodity that may have little use in the future. There is more speculation around Bitcoin than there is commerce conducted with it, right?
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June 22, 2011, 07:42:37 PM
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Nobody goes into that restaurant anymore, it's too crowded, and you always have to wait in line!

Jaime Frontero
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June 22, 2011, 07:43:19 PM
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There is more speculation around Bitcoin than there is commerce conducted with it, right?

i'm not sure.

but clearly, you yourself will not be speculating in mining equipment - so, subjectively at least, you are mistaken.
XX55XX
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June 22, 2011, 07:46:42 PM
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There is more speculation around Bitcoin than there is commerce conducted with it, right?

i'm not sure.

but clearly, you yourself will not be speculating in mining equipment - so, subjectively at least, you are mistaken.

So are you suggesting that I should move to an AMD setup?
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June 22, 2011, 07:49:34 PM
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Why are you flogging that poor nvidia card for almost no profit? I'll trade you it for a AMD HD5770 straight up - almost brand new, never been above 72C. Makes ~0.25BTC/day. Cheesy

^_^
Jaime Frontero
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June 22, 2011, 07:50:40 PM
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There is more speculation around Bitcoin than there is commerce conducted with it, right?

i'm not sure.

but clearly, you yourself will not be speculating in mining equipment - so, subjectively at least, you are mistaken.

So are you suggesting that I should move to an AMD setup?

i would only suggest that if you find Bitcoin to be a worthy idea, you participate in what ever fashion seems best to you.

on a strictly technical level, if you want to mine then yes - go to AMD/ATI GPU products.

there are serious gamers out there who will pay well for your nvidia card.  it's a good one - for gaming...

EDIT:  see the post directly above this one.
XX55XX
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June 22, 2011, 07:57:27 PM
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Yeah, I'm a serious gamer, and I love Nvidia. Their drivers are more stable. But I do understand somewhat on a technical level why they are inferior to AMD cards in these sorts of calculations.

Hmm. Maybe when AMD's new GPU architecture comes out, I'll consider a swap. But I am sticking to my GTX 560 Ti for now.
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June 22, 2011, 07:59:23 PM
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It's unlikely to ever become unprofitable though it may become somewhat less profitable. Mining has an associated cost, unless you live in a dorm or with your parents - and if you're mining at any real scale in a dorm or parents' basement, someone is going to come yelling at you about the electric bill REALLY soon...

If most people can, after cost of operations, make $1,000 per month from a small mining operation, that's cool and they're likely to keep doing it. They might even buy new hardware to expand their operation, thus increasing the total hashrate of the network and driving difficulty up - therefore driving profit down.

If, after cost of operations, they can make $100 per month from that same operation, some will keep mining, but are highly unlikely to expand, and many will decide that the time, electricity, air conditioning, noise and heat are simply no longer worth it for a mere $100. Now the hashrate decreases and difficulty goes down.

Difficulty is similar to price in that they are both trying to find some stable equilibrium. If mining ever does dip into "unprofitable" territory it will likely only do so for a very brief time, similar to the value of BTC after the $31 bubble burst and it found its way back to equilibrium. Realistically there will be a level of "less profitable" that miners will begin to leave at, thus balancing around a particular difficulty/price ratio.

Homeostasis applies to more things than the populous at large seems to realize, and it applies here too.

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