A case study in entry-level mining

[timk225]

I wasn't being serious, I won't use my 9 GPUs to mine BTC.  They can't even find a Darkcoin block at 2500-3500 difficulty, much less 8.85 billion (currently) for BTC.

[Zelek Uther]

Musings
The other thing working against me was my stubborn insistence on using USB miners with MinePeon. I had to spend extra money on USB hubs which don't provide any return, and MinePeon itself wasn't exactly super stable either.

The only time I had trouble with MinePeon, it turned out to be a problem with my USB hub (not MinePeon).

I've been running MinePeon 24x7 for 11 months now, and with the exception of that one dodgy hub, it has been rock solid (still running as I type this)

[LogicalUnit]

One Year Later

It's been a year since I began this experiment. In that time I have spent about AUD$2500 for a current balance of 0.67 BTC plus an Antminer S1 mining at 180GH/s. Difficulty has risen from 15 million to 10 billion. The current blockchain on my PC is 20GB (didn't check when I started). Bitcoins have risen from AUD$130 each to AUD$700 each, peaking at over AUD$1200. I have invested and reinvested 5 times. I have solved at least one block. I've had a lot of fun, a lot of frustration, and gained a whole lot of knowledge. You'd have to say that as an investment this has failed completely, but as a learning experience it has been worth it. Rather than speculating, I put up the cash to find out for sure whether this was worth doing. I haven't solicited any donations -- only technical assistance running my rig.

Funnily enough, I really haven't spent my bitcoins on anything besides mining hardware! I don't plan to cash out to fiat, but rather to save the BTC for future online services.

[freedomno1]

Difficulty went from 15 million to 10 billion
Remembers mining a bit of change with a laptop 1 year ago
That was a total bust from a mining perspective but as an educational experience quite cool

One Year Later

Funnily enough, I really haven't spent my bitcoins on anything besides mining hardware! I don't plan to cash out to fiat, but rather to save the BTC for future online services.

I must admit in the last year we have certainly seen a lot more online services starting up it's been a good year more or less with the occasional disaster (gox) (inputs.io)

[kabopar]

One Year Later

It's been a year since I began this experiment. In that time I have spent about AUD$2500 for a current balance of 0.67 BTC plus an Antminer S1 mining at 180GH/s. Difficulty has risen from 15 million to 10 billion. The current blockchain on my PC is 20GB (didn't check when I started). Bitcoins have risen from AUD$130 each to AUD$700 each, peaking at over AUD$1200. I have invested and reinvested 5 times. I have solved at least one block. I've had a lot of fun, a lot of frustration, and gained a whole lot of knowledge. You'd have to say that as an investment this has failed completely, but as a learning experience it has been worth it. Rather than speculating, I put up the cash to find out for sure whether this was worth doing. I haven't solicited any donations -- only technical assistance running my rig.

Funnily enough, I really haven't spent my bitcoins on anything besides mining hardware! I don't plan to cash out to fiat, but rather to save the BTC for future online services.

Enjoy the journey and experience

Similar tale here, started out of curiosity with GPU's, transitioned to USB based ASICs (my BE's are still hashing!), then a variety of other miners, including a few S1's.  Peaked at about 1.6 TH/sec.  Can't say that there was any financial gain (to the contrary), and most of my earned BTC was spent on mining hardware too.  No, did not find any blocks yet...

Cheers

[ABitNut]

I didn't realise that the difficulty has increased that much in only one year. Seeing how little profit miners make right now is a bit worrying. The game has changed and the "power" now seems to be with a limited number of big mining rigs.

Even if the difficulty stabilizes it will still be harder for anyone to get started on mining.

[ChuckBuck]

That's something they don't teach you in mining school.

"The Re-invest"

With the difficulty climbs only way to stay in the game, is to re-invest into more hardware(buying new and selling old) with your profits every 3 to 6 months.

'Tis the way with technology.

[easy8]

i was asking around in other threads about exactly this problem... that mining at an entry level is probably completely dead.
thanks for sharing your experiences 
what are you planning to do now?
will you try to stay in the "industry" somehow?
will you buy bitcoins or start mining somehow?
i have read about cloud mining, i am really interested in it now. is that something you would try? looks like you don't have the hassle of building, maintaining, updating a miner, but you can just rent it from those who have comparative advantage: the cloud miners.
look, for example here's a review. https://cloudmining.guru/wp/category/reviews/
the review is even comparing and ranking the existing services.
what do you think?
or is it a dead end? what's the general view on cloud mining services?

[murraypaul]

i have read about cloud mining, i am really interested in it now. is that something you would try? looks like you don't have the hassle of building, maintaining, updating a miner, but you can just rent it from those who have comparative advantage: the cloud miners.
look, for example here's a review. https://cloudmining.guru/wp/category/reviews/
the review is even comparing and ranking the existing services.
what do you think?
or is it a dead end? what's the general view on cloud mining services?

They charge you more than you will ever make.
Think about it, why would they sell you a dollar for 75 cents?

[Coinsera]

Very Interesting information has shared, I would like to thank you

Thanks.

[jonnybravo0311]

i have read about cloud mining, i am really interested in it now. is that something you would try? looks like you don't have the hassle of building, maintaining, updating a miner, but you can just rent it from those who have comparative advantage: the cloud miners.
look, for example here's a review. https://cloudmining.guru/wp/category/reviews/
the review is even comparing and ranking the existing services.
what do you think?
or is it a dead end? what's the general view on cloud mining services?

They charge you more than you will ever make.
Think about it, why would they sell you a dollar for 75 cents?

You just absolutely perfectly summed up cloud mining.  +1

[philipma1957]

i have read about cloud mining, i am really interested in it now. is that something you would try? looks like you don't have the hassle of building, maintaining, updating a miner, but you can just rent it from those who have comparative advantage: the cloud miners.
look, for example here's a review. https://cloudmining.guru/wp/category/reviews/
the review is even comparing and ranking the existing services.
what do you think?
or is it a dead end? what's the general view on cloud mining services?

They charge you more than you will ever make.
Think about it, why would they sell you a dollar for 75 cents?

You just absolutely perfectly summed up cloud mining.  +1

they sold me 737 usd  contract in June of 2013 . I have collected  about 400  usd contract ends this July. I will collect about 20 usd more.  My loss will be about 300 usd.

As to making  a profit at this the op made some poor choices.  It happens.  As you can see I made a poor choice with cloudhasher.

  To all new miners I suggest buying 2 miners cost of .2btc from this seller. maybe you need a hub and 2 power bricks so lets say .25btc  or 150-160 usd

 https://bitcointalk.org/index.php?topic=629006.0 

 I also suggest taking .25btc and leaving it untouched in a second  btc wallet.   so you spend .5 btc total or 325 usd.

Then mine 1 of the 2 miners at an easy pool like bitminter.com

and learn to solo mine with the second miner.

Leaving the matching .25btc untouched.

visit your totals in a month and see what you have.  do this once a month for six months. see what you have.

 

[nwfella]

Best mining experience I think I've ever read.  Found alot that rang true with my own limited experience mining.

[3elks]

My laptop is so shitty its not even funny.So i will never b able to experience that glorious feeling of mining. So jelly.

[easy8]

i have read about cloud mining, i am really interested in it now. is that something you would try? looks like you don't have the hassle of building, maintaining, updating a miner, but you can just rent it from those who have comparative advantage: the cloud miners.
look, for example here's a review. https://cloudmining.guru/wp/category/reviews/
the review is even comparing and ranking the existing services.
what do you think?
or is it a dead end? what's the general view on cloud mining services?

They charge you more than you will ever make.
Think about it, why would they sell you a dollar for 75 cents?

You just absolutely perfectly summed up cloud mining.  +1

they sold me 737 usd  contract in June of 2013 . I have collected  about 400  usd contract ends this July. I will collect about 20 usd more.  My loss will be about 300 usd.

As to making  a profit at this the op made some poor choices.  It happens.  As you can see I made a poor choice with cloudhasher.

  To all new miners I suggest buying 2 miners cost of .2btc from this seller. maybe you need a hub and 2 power bricks so lets say .25btc  or 150-160 usd

 https://bitcointalk.org/index.php?topic=629006.0 

 I also suggest taking .25btc and leaving it untouched in a second  btc wallet.   so you spend .5 btc total or 325 usd.

Then mine 1 of the 2 miners at an easy pool like bitminter.com

and learn to solo mine with the second miner.

Leaving the matching .25btc untouched.

visit your totals in a month and see what you have.  do this once a month for six months. see what you have.

 

by cloudhasher you meant cloudhashing.com?

[snowcrawl]

I've had a lot of fun, a lot of frustration, and gained a whole lot of knowledge. You'd have to say that as an investment this has failed completely, but as a learning experience it has been worth it. Rather than speculating, I put up the cash to find out for sure whether this was worth doing. I haven't solicited any donations -- only technical assistance running my rig.

Funnily enough, I really haven't spent my bitcoins on anything besides mining hardware! I don't plan to cash out to fiat, but rather to save the BTC for future online services.

Unfortunately, the sales pitch from sellers of mining hardware and cloud mining has emphasized words like investment and profit.  That's how they've been able to make their profit.  Those of us who have tried it out now know otherwise.  The real investment here is that you took the chance to learn about cryptocurrency while it is still in it's infancy.  You are an early adopter, and have the opportunity to make some moves in this early stage that could lead to a payoff at a later date.  We haven't figured out what that groundbreaking move will be, time will tell.

I started off with a 30 GH year contract from a seller on ebay.  Then got into mining with a rig made of USB technobit HEX16A2 miners (also from ebay), starting with a pair of miners early in March 2014.  Over the first month I worked my way up to a total of 6 miners (about 130 GH or slightly more assuming ideal conditions).  I also had some trouble with the software that came with it.  The USB connection was flakey and would periodically drop out, often while I was away from home, leading to lost mining productivity.  I would need to come back often to reset it.  A user on here helped me make the transition to a more stable cgminer version for technobit miners.  Once I got it properly configured, it has run rock solid, with hardly any hiccups.  About 125 GH on average.  I figure that the weekly power costs is about $8, so I will obviously be shutting it off at some point within the next couple months.  At the peak, I was seeing a 0.01 BTC payout per day.  Now it is down to a bit longer than every other day.  Sometime soon it will be down to every third day.

The total cost of the miners was around $970.  Add 13% GST, since I imported them from the States to Canada.  So now up to $1096.  I also ordered special adapters and 4 different computer power supplies.  I blew the first two, which were cheap.  Then I opted for 2 good ones.  Then I bought a new computer so that I could dedicate my old laptop to mining.  So basically completely forget about any fiat for bitcoin and back to fiat return on investment.

I think I am now done with reinvesting in mining.   At first I was excited to be buying and adding mining equipment.  Then I noticed that the ebay seller was dropping the price significantly.  The very last miner I bought was half the price of the first one. Something was up.  I had to do some homework to figure out what was going on with the mining difficulty and the ROI, and make sure to not get carried away.  

After 3 months, as of today I have just reached 0.6 BTC according to my BTC Guild dashboard.  I have reinvested the majority of that into PB mining, with a current contract of 150 GH.  My multibit wallet has received close to $900 worth of bitcoin from a variety of sources since I first downloaded it last September.  Now I think I am done with reinvesting in hashing power.  I am instead trying to spend my weekly earnings on items that I will enjoy, including coffee.  Whatever gourmet treats I can find on amazon with free shipping, such as handmade pasta sauces.  The next bitcoin I will get will come from a fiat exchange.  

[STT]

With the cloud mining contract, wont this work to profit if BTC rises in price.    So you exchange 100 dollars, you buy a btc and pay them.  They mine 0.9 btc and price has risen to 1000 so you profit ?  
Of course why not just hold plain btc but anyhow cloud could turn a profit.   Right now prices are down many months so theres no profit but its not impossible

I suppose the bottom line might be the contract really pays off when diff rises slower (then expected) or perish the thought if diff dropped.  Then you get a bumper harvest and ideally the price of btc rises later.  Im just supposing what it'd take to profit.

You know its similar with 'real' futures contracts, the vast majority will expire worthless (or less then paid) but that dont make the CBOE a con

[brian_23452]

With the cloud mining contract, wont this work to profit if BTC rises in price.    So you exchange 100 dollars, you buy a btc and pay them.  They mine 0.9 btc and price has risen to 1000 so you profit ?  
Of course why not just hold plain btc but anyhow cloud could turn a profit.   Right now prices are down many months so theres no profit but its not impossible

I suppose the bottom line might be the contract really pays off when diff rises slower (then expected) or perish the thought if diff dropped.  Then you get a bumper harvest and ideally the price of btc rises later.  Im just supposing what it'd take to profit.

You know its similar with 'real' futures contracts, the vast majority will expire worthless (or less then paid) but that dont make the CBOE a con

There is no set of circumstances where paying 1 btc now to get some amount less then 1 btc later is ever good business sense, barring some very rare and unique situations.  Yes, playing tricks with exchange rates you can kid yourself into thinking you made a profit but it is always a bad business decision. If I buy btc with my 100USD, and you buy contracts (that will yield less total btc) than at the end of the day I will have more btc than you.  BTC could rise to 1000USD like you said, I'll still have more money than you.  The only situation where buying mining contracts could be considered profitable is if they pay out more than they cost.  But they pretty much never do, which makes them a stupid investment. 
They aren't anything at all like futures contracts.  A much better comparison would be to consider them some sort of bond\loan.  With a bond, you have to decide if you want the certainty of the money remaining constant, or are willing to risk a loss to possibly make a gain.  But BTC contracts are like bonds with negative interest rates.  Who in their right mind would give someone 100 dollars now to get paid back 75 dollars later on?  It makes no difference if the purchasing power of the dollar rises, it was still a bad decision. 
And lastly, about the contracts paying off when the difficulty rises slower.  Naturally they would charge a substantial premium during those times.  What you are basically betting on there is that you are better than they are at predicting difficulty increases which seems.....very unlikely.  And even if you are, these things are so heavily padded with profit in their favor they would have to be WAY off for that to work out in your favor.

Tldr, paying 1BTC now to get back .75BTC later is always a bad idea. 

[ShakyhandsBTCer]

With the cloud mining contract, wont this work to profit if BTC rises in price.    So you exchange 100 dollars, you buy a btc and pay them.  They mine 0.9 btc and price has risen to 1000 so you profit ?  
Of course why not just hold plain btc but anyhow cloud could turn a profit.   Right now prices are down many months so theres no profit but its not impossible

I suppose the bottom line might be the contract really pays off when diff rises slower (then expected) or perish the thought if diff dropped.  Then you get a bumper harvest and ideally the price of btc rises later.  Im just supposing what it'd take to profit.

You know its similar with 'real' futures contracts, the vast majority will expire worthless (or less then paid) but that dont make the CBOE a con

Most cloud mining contracts are paid for in bitcoin.

[LogicalUnit]

Antminer S1

D'oh. It turns out after I bought my Corsair CX600M PSU that I had a perfectly good one available in a box under my bed. Chalk up another AUD$120 I should not have spent.

The Antminer S1 is performing great. Its uptime is now 58 days, and the mining software has restarted exactly once (don't know why or if this is a problem yet). It's just chugging away in the patch panel in the corridor. Temp is 52 degrees C and fan is at 2820 rpm. There is noticeable noise.