While sitting around during the government shutdown (locked out from my contract work site) I decided to finally spend some time learning about Bitcoin. Over the course of a few days I setup BitMinter on a PC with an OpenCL compatible video card and let it start working (at a fantastic 18 MH/s). Next I setup a wallet on Blockchain.info to receive all those new minted coins (yea, like that will ever happen with the video card miner). Continuing on, just to see what it would do, I installed the full Bitcoin-QT client and let it sync up. Finally, so that I can get money in and out eventually, I setup accounts on Dwolla and CampBX, started priming the pump with a small transaction, and will not sit back and wait a month so I can bring cash in, convert it to Bitcoin, and move it on to my wallet (or the other way, of course).
After letting this run for a couple of days and reading more about the mining hardware options I took the big plunge. For $154 I picked up seven of the USB Block Erupters, a USB hub, and a small USB connected fan. The parts showed up yesterday and I'm now hashing along at about 2,300 MH/s. At this rate I may actually see a few m
BTC before the difficultly level shoots high enough that I'll consume more in power than what the miners can produce in $ equivalent coins. According to one calculator that point will come in about six months. It also shows that I'll never break even on my investment.
So, with no hope of ever breaking even why did I start this? Really just to learn about the technology. If nothing else, my little mini-minter makes a nice piece of desk art. The little lights flashing every time a work unit completes is fun to watch out of the corner of my eye when working.
Now, for a prediction. I do think the difficultly level will plateau or at least slow down its increase in the near future. When the coin produced are worth at the power consumption level there is no incentive for people to stand up any more of the $10K plus hashing rigs as there will never be a return on investment. There may be a few hobbyists like me who still bring on small setups and keep a slight increase in the difficultly level but that could also be offset by larger rigs dropping off if they are unable to make any money. Guess we will see in the next six months.
Finally, a question. I understand the reasoning for distributing the transaction fees to miners as it is the new blocks which protect the integrity of the Bitcoin network. What I don't follow is why there is no commission be paid out to the people running the full Bitcoin-QT nodes? Considering the amount of disk storage (12GB plus) and the network bandwidth (45 active connections to mine yesterday) there is a definite resource commitment to operate this software. This software is also as critical as the miners as it keeps the data distributed and prevents anyone from taking over the network. If there was a percentage of the transaction fee going to these node operators it would help to ensure there are always plenty of active nodes in the network. Perhaps I'm missing something here.
Guess that is enough for my "hello world" message to get out of the newbie jail.
Here is a quick photo of the setup. One of the Erupters is in an internal USB port in my computer while the other six and the fan are on the hub.
