A case study in entry-level mining

[CaptEmulation]

Those S1 Ants sure do know how to make a racket.  My stack of bitburner bitfuries can barely be heard (since having turned off all BFL & BE Cube) compared to the S1.  I just have two and the sound has been compared to a vacuum cleaner.

[ChuckBuck]

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.

Dude, before you give up on mining, I'd suggest you look at selling all your equipment and go with this sexy beast:

https://bitcointalk.org/index.php?topic=656461.0

Antminer S3....so precious, so lovely.

[timk225]

See what I mean about ASICs becoming obsolete so quickly?  The Antminers have gone from S1 to S2 to S3 in a matter of months!  Who thinks anyone will be beating down your door to buy your mere months-old S1 or S2 now?  Huh?  See?  See? See?

I told you so!!!!!

The only people getting rich off ASICs are the people selling them!

[jamestown2035]

See what I mean about ASICs becoming obsolete so quickly?  The Antminers have gone from S1 to S2 to S3 in a matter of months!  Who thinks anyone will be beating down your door to buy your mere months-old S1 or S2 now?  Huh?  See?  See? See?

I told you so!!!!!

The only people getting rich off ASICs are the people selling them!

It wouldn't be so bad if they didn't have a constant supply they were "burning in" It's kind of like selling you gold rich land and then processing most of the material on it before you can arrive. 

[ShakyhandsBTCer]

See what I mean about ASICs becoming obsolete so quickly?  The Antminers have gone from S1 to S2 to S3 in a matter of months!  Who thinks anyone will be beating down your door to buy your mere months-old S1 or S2 now?  Huh?  See?  See? See?

I told you so!!!!!

The only people getting rich off ASICs are the people selling them!

It wouldn't be so bad if they didn't have a constant supply they were "burning in" It's kind of like selling you gold rich land and then processing most of the material on it before you can arrive. 

That is exactly what happens when you preorder machines and the manufacturer uses the machines they build for you to mine for themselves.

[snowcrawl]

This is kind of reminiscent of personal computers, only the march towards obsolecence is occurring at breakneck pace.  When you first ordered your Antminer S1, it was like you were buying a 386 computer in 1991, and it didn't even come equipped with a dial up modem yet.  Then within a few months after your made your proud puchase they released the pentium II and now are accepting preorders with for pentium IV.

THe iMac G3 looked neat in the year 2000, but what is one worth today.  Wouldn't it have been a better idea to instead invest in Apple stock had you wanted to buy Apple back in the year 2000?  Likewise, I think we need to find a different way to invest in this that will actually stand a chance to be beneficial to more than just the miner manufacturers.

Even if you think you can afford to keep up with this, you are still involved with a subpar investment.  And you can't see just how poor it is until you have made a major purchase on a machine than becomes an instant lemon.

[Cranky4u]

If you have obsolete equipment, I am happy to look at taking it off your hands as I re-invested my BTC into a solar panel system. Sure, it only run ~14 hours per day via an UPS but it is better than letting those older ASICs / USBs just collect dust.  PM me if you interested...

[LogicalUnit]

A Word on Wallets

When I started out, I used the Core Bitcoin-Qt client. It seemed like a good place to begin. Now, having tried a couple of other clients, I thought I'd post about my experiences with them here.

Armory was recommended to me by other users on this forum, so I installed it. It basically sits on top of Bitcoin-Qt/bitcoind and provides additional functionality. Importantly, it provides offline wallets. An offline wallet is when you store the private key on a computer that is not connected to any network, and therefore cannot be hacked. I fortunately had an old Windows XP laptop lying around that is perfect for this. Additionally, Armory allows you to print a "paper backup" that will completely recover a wallet in case it is lost or damaged. Very useful. Functionality as of 0.91.2 is pretty good, although I admit there is one thing I don't really understand: in previous versions of Armory, the entire blockchain would be scanned once the client was synchronised with the network -- a process that takes as much as 15 minutes. As of this latest version, that doesn't seem to happen; once synchronised, wallet functionality is available immediately.

Electrum is different because it doesn't store the blockchain locally; it retrieves transaction data from a list of servers. Current as of writing, the blockchain is in excess of 23GB. So, if you want to save a bunch of drive space, this is the way to go. Electrum provides a backup feature similar to an Armory paper wallet in the form of a "seed". A seed is a string of twelve words that can be used to recover a wallet. I just printed out the seed and pretty much have something similar to what Armory provides. If you're clever, you can memorise the 12 words and use a brain wallet -- but I wouldn't trust myself with this. Electrum can also use offline wallets in a process very similar to Armory. Electrum also provides QR codes that you can scan with your phone.

I have an Android phone but have not yet used Hive on it. In this situation I would use an online wallet with a small balance so I could easily scan QR codes. The only danger is that if my phone were hacked/stolen, the attacker could take my BTC -- but this is the tradeoff for having quick transactions. If you're really worried, you could probably encrypted your Android wallet.

I'll give Hive a go now and report back.

UPDATE

Hive Android is a good wallet too. It provides functionality to make an encrypted backup of your private keys, and upload it to various places (I just used my email account). Sending BTC using QR codes is easy. I was also able to easily share my payment address on Facebook. The private keys stored on the device are not protected, so if your phone is stolen they can steal your BTC. I just put 0.1 BTC on my phone wallet and I'm ready to go

[ShakyhandsBTCer]

If you have obsolete equipment, I am happy to look at taking it off your hands as I re-invested my BTC into a solar panel system. Sure, it only run ~14 hours per day via an UPS but it is better than letting those older ASICs / USBs just collect dust.  PM me if you interested...

Are you able to sell your excess solar energy back to the electric grid? If so then you would still be essentially be "paying" for the electricity that these miners use in the form of less funds from the utility company

[_Miracle]

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.

Dude, before you give up on mining, I'd suggest you look at selling all your equipment and go with this sexy beast:

https://bitcointalk.org/index.php?topic=656461.0

Antminer S3....so precious, so lovely.

All the more reason to get "one more Ant" LogicalUnit. You already have the PSU   I put 2nd fans pulling air out to keep the temps under 50  because it's hot and humid where I'm at (52c seems warm).
BTW Thank you for this post, it's always informative.



"Antminer S3....so precious, so lovely. " : it really is. I hope they price the upgrade reasonably.

[LogicalUnit]

Paper Wallets

As a Bitcoin enthusiast, one of my goals is to get other people interested in the currency. To do this, I'd like a convenient way of sending BTC to someone who doesn't have a wallet yet. This can be accomplished with a physical wallet. A physical wallet is just a bitcoin address (public) along with its private key (hidden). You deposit money to the address, which can can viewed and verified. Then, when you're ready to collect your BTC, you import the private key into your wallet and withdraw the funds.

Think of it like a piggy-bank. You can add as much BTC as you like, then, when you're ready, you smash it open to reveal the private key and get the money.

There are two kinds of physical wallet: the first is where the actual physical wallet is worth something, such as a coin made from gold or silver. The second kind is where the physical wallet is worth nothing ie made from paper.

For the life of me, I cannot understand why someone would make a physical wallet out of something valuable. Once a gold/silver/platinum coin has had its BTC withdrawn, why would someone want to collect it?? It's basically an action figure or other collectable item that loses all of its value when you open the original packaging!

On the other hand, a paper wallet is completely worthless once its funds have been withdrawn. This is fine because you're not losing anything more than a piece of A4 paper and some printer ink. You can optionally add tamper resistant tape and a waterproof bag. Pretty cool, and inexpensive.

Electrum, as I discussed earlier, is a lightweight client that doesn't need to download the blockchain. It supports scanning QR codes using a plugin. However, I haven't been able to get this working on Windows yet. I've made a post asking for help with it in the Electrum Alternative Clients subforum.

The basic idea is that you give someone a paper wallet who has never used BTC before. They install Electrum, crack open the paper wallet, scan the QR code with a webcam, and hey-presto! They've got the money and are ready to spend it.

Check it out here:

https://bitcoinpaperwallet.com/

[ALToids]

I just started using Armory for my paper wallet and I find it is much nicer for my needs than the basic QT wallet.

I'll have to try out Electrum soon, I would love to get some of my friends interested and nothing motivates like free money.

[LogicalUnit]

What I Should Have Done

With the benefit of hindsight, it has become increasingly apparent that I should have just held my original 13 BTC. I would have multiplied my investment tenfold.

BUT it's not too late. I have bought 3 BTC @ AUD$695 each from a trader on http://localbitcoins.com and sent them to three paper wallets worth 1 BTC each. The plan is to hold them in a safe for a year, and then see what they are worth.

My prediction: they will at least double in value

PS: If you use a web wallet, be sure to set up Two-Factor Authentication!

[ABitNut]

What I Should Have Done

With the benefit of hindsight, it has become increasingly apparent that I should have just held my original 13 BTC. I would have multiplied my investment tenfold.

BUT it's not too late. I have bought 3 BTC @ AUD$695 each from a trader on http://localbitcoins.com and sent them to three paper wallets worth 1 BTC each. The plan is to hold them in a safe for a year, and then see what they are worth.

My prediction: they will at least double in value

PS: If you use a web wallet, be sure to set up Two-Factor Authentication!

From miner to speculator Good luck.

[Bitsaurus]

What I Should Have Done

With the benefit of hindsight, it has become increasingly apparent that I should have just held my original 13 BTC. I would have multiplied my investment tenfold.

BUT it's not too late. I have bought 3 BTC @ AUD$695 each from a trader on http://localbitcoins.com and sent them to three paper wallets worth 1 BTC each. The plan is to hold them in a safe for a year, and then see what they are worth.

My prediction: they will at least double in value

PS: If you use a web wallet, be sure to set up Two-Factor Authentication!

From miner to speculator Good luck.

This is what all the new people to the forum seeking riches don't understand.  You don't necessarily need to mine to make wealth, and in the case of Bitcoin, currently you lose wealth by mining (for the most part).  Temporarily use Bitcoin as a hedge against fiat.

[jonnybravo0311]

What I Should Have Done

With the benefit of hindsight, it has become increasingly apparent that I should have just held my original 13 BTC. I would have multiplied my investment tenfold.

BUT it's not too late. I have bought 3 BTC @ AUD$695 each from a trader on http://localbitcoins.com and sent them to three paper wallets worth 1 BTC each. The plan is to hold them in a safe for a year, and then see what they are worth.

My prediction: they will at least double in value

PS: If you use a web wallet, be sure to set up Two-Factor Authentication!

Where's the fun in buying and holding?  In all seriousness, I've read through the thread and you had a number of unfortunate incidents throughout your mining experience, which more than likely impacted your ROI.  Anyway, best of luck with the new speculation approach

[freedomno1]

What I Should Have Done

With the benefit of hindsight, it has become increasingly apparent that I should have just held my original 13 BTC. I would have multiplied my investment tenfold.

BUT it's not too late. I have bought 3 BTC @ AUD$695 each from a trader on http://localbitcoins.com and sent them to three paper wallets worth 1 BTC each. The plan is to hold them in a safe for a year, and then see what they are worth.

My prediction: they will at least double in value

PS: If you use a web wallet, be sure to set up Two-Factor Authentication!

With the benefit of hindsight I'm glad I did not do mining but I went into speculation instead lol...
That wasn't very beneficial but pretty much still have a bit of a gain/loss in the end more less at break even only thing that really worked was depositing in Just-Dice after Nakowa went in XD

I hope that the holding strategy works out for you my main one right now is that and a bit of mintpal/betmoose since I'm a better predictor than 50% of the time.

[drockfarm]

I commend you for actually taking action and getting started.  Most people just sit and talk about how they can make all this money but never try anything.  The money you lost is minor compared to the knowledge you gained.  Keep trying never give up and don't listen to the pessimists on this forum.  If you never try you'll never make it!

Remember 99% of people in the world conform to the system and don't want to think out of the box, go be the 1% buddy!  Good job!

[ABitNut]

Congratulation on your first bitcoin!! I am still trying to get my first. I am here to suggest an option to everybody. You spent 2500 dollars and a lot of time to try to get the miners running which is on you network, making a lot of nose, and taking a lot of electricity. With cloud mining on pbmining which is a really cheap site where it only cost 0.003BTC/GH which is way cheaper than your rig. For how much 180GH on pbmining it would only cost about 335 dollars and you dont even have to set the thing up. This site can be trusted because i use it and i get paid every week. After you get the GH that you want you just sit back and the site does all the mining. I am giving a link with my referal so you guys can help me out but if you dont want to use my link i understand.


copy and paste : http://pbmining.com?ref=andylin
regular site : http://pbmining.com

I have another suggestion. Just buy and hold your bitcoin. Pbmining is not going to earn you back the bitcoin that you in. Read up on it in several other threads. Cloud hashing in general is not a good strategy.

[LogicalUnit]

I commend you for actually taking action and getting started.  Most people just sit and talk about how they can make all this money but never try anything.  The money you lost is minor compared to the knowledge you gained.  Keep trying never give up and don't listen to the pessimists on this forum.  If you never try you'll never make it!

Remember 99% of people in the world conform to the system and don't want to think out of the box, go be the 1% buddy!  Good job!

This made my day. Thanks for the positive energy!!