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Author Topic: Cost of electricity to mine or mint bit coins  (Read 8732 times)
caston
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February 16, 2011, 01:57:34 AM
 #1

I'm one of those people in their late twenties that still live with my parents. If I ordered a few motherboards with multiple PCIe 2.0 slots and bought several of the latest ATI cards and became a miner and didn't come clean to my parents about what I was doing they might be none the wiser. Well I know that my parents would notice the higher bill but there are probably miners that live at home where their parents wouldn't notice, perhaps they work a lot and earn good money.

So is the exchange rate of the bitcoin really that attached to the price of electricity?  Considering that many people may not be paying for their electricity. It would be like taking from Peter and selling to Paul. I'm not trying to accuse miners of leeching on their parents. Hell if I get flamed for doing that myself I would probably say that I saw it coming. What I am doing here is questioning some of the assumptions we have for it could be that much of the content of the internet is created in a similar fashion. (for example blogs, forums, wikis, irc chats) e.g. if all electricity was metered to the individual (impossible without a smart grid I know) would there be much less free content on the internet.

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comboy
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February 16, 2011, 02:18:16 AM
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So is the exchange rate of the bitcoin really that attached to the price of electricity?

I agree there may be many people who have it for "free". Those living with their parents, those working at universities, those that can put it somewhere in their office.

But the problem is that it doesn't scale. When you want some decent amount of computing power, someone will notice these noisy boxes Wink And I think that assumption that maybe it does not have to scale, because there may be many many people having just single machine, is wrong (I think we can already see power-law computing power distribution in the network). When you are doing something on a bigger scale you cut many costs. Just configuration is copy&paste instead of hours spent on checking wtf is it not working right, and then cheaper components when ordered in in higher quantities, maybe some more optimal cooling, and so on.

Variance is a bitch!
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February 16, 2011, 02:19:31 AM
 #3

Where I live, electricity costs $0.25 per Kwh. I generate about 0.5 BTC or better per Kwh with 2 GPU miners. At current exchange rates, I make a 115% profit.

As for electric bills impacting exchange rates, I doubt it. Energy costs very too much with location.

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February 16, 2011, 02:20:19 AM
 #4

Its not really tied to the electricity price however that is  the thing we used to set a price initially.  You could say the market price indicator was bootstrapped by that metric.  If you think it should be zero price because you mine them in your basement then sell them to me for 0.01  Tongue


caston
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February 16, 2011, 02:26:46 AM
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Its not really tied to the electricity price however that is  the thing we used to set a price initially.  You could say the market price indicator was bootstrapped by that metric.  If you think it should be zero price because you mine them in your basement then sell them to me for 0.01  Tongue

That's the other side of the equation. Could some miners be giving "mates rates" on their bitcoins to others but those bitcoins eventually end up with a middle man that sells them at market rates.

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Dude65535
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February 16, 2011, 02:31:30 AM
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Another thing to consider when it comes to cost, bitcoins are not the only thing you are producing with that electricity. You also produce heat. In the winter that will reduce the effective cost of a at home miner, and increase it in the summer. Any value you can get out of the waste heat will help lower the effective cost of bitcoin mining.

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caston
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February 16, 2011, 02:37:53 AM
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Another thing to consider when it comes to cost, bitcoins are not the only thing you are producing with that electricity. You also produce heat. In the winter that will reduce the effective cost of a at home miner, and increase it in the summer. Any value you can get out of the waste heat will help lower the effective cost of bitcoin mining.

Offtopic suggestion here I like this idea of having a dual purpose GPU miner AND heater. Even in warmer seasons it could be connected to the hot water system. I've heard of people using their composter to heat their hot water.

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Hal
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February 16, 2011, 03:57:26 AM
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Probably should amortize the price of the graphics card over two or three years. That state of the art card may not be too competitive in a couple of years. This amortized cost may be even greater than the cost of electricity.

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February 16, 2011, 04:01:28 AM
 #9

Offtopic suggestion here I like this idea of having a dual purpose GPU miner AND heater. Even in warmer seasons it could be connected to the hot water system. I've heard of people using their composter to heat their hot water.
You could probably water cool your GPUs and run the coolant through a heat exchanger to heat your water, but I imagine it wouldn't be too efficient.


Also unrelated: NOAGENDAMARKET'S QR CODE AVATAR ACTUALLY SCANS.

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February 16, 2011, 08:03:58 AM
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Your example illustrates that for a lot of miners, it is the marginal cost of mining that determines how many hash/s they contribute, not the total cost.

In the long term, this is bad news for commercial miners who need to recoup their total investment (marginal + fixed cost) to stay in business.

There will always be someone, somewhere in the world competing against them for whom the marginal cost is zero, and who doesn't care about fixed cost.

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February 16, 2011, 08:29:00 AM
 #11

Quote
But the problem is that it doesn't scale.

Doesn't it?

I worked at a place once that used a supercomputer for numerical simulations.

The average load was only around 50%.

The reason is that peak capacity was only required at certain times of the day when lots of users submitted jobs at once and wanted a quick result.  Since most jobs lasted less than 12 hours, the supercomputer was usually just working at 10-20% capacity between 1am and 7am.

What is interesting about the 1am-7am period, is that in some parts of the world electricity generated simply gets "dumped" at the power station, because powering down and up again would be even more inefficient.

I suspect that eventually some clever entrepreneur will form a joint venture with a power company and offer a leasing deal for supercomputer customers, where they can get a reduced rate if they allow mining in the 1am-7am period.

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comboy
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February 16, 2011, 03:59:16 PM
 #12

I suspect that eventually some clever entrepreneur will form a joint venture with a power company and offer a leasing deal for supercomputer customers, where they can get a reduced rate if they allow mining in the 1am-7am period.

It does sound very interesting and I haven't thought about something like that.

But if you buy hardware just for mining you do not want it to mine only 30% of the time, and most of datacenters that may have some "free cycles" to spend, are not GPU based currently  (as far as I can tell, and even if they have some teslas for sci computing, that's still not really what you want).

Variance is a bitch!
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February 17, 2011, 07:17:12 PM
 #13

Buying cards right now is still profitable, although the predicted 40% increase in difficulty will surely put a dent in the profit margins.

Depending on how many cards you are running it will change, but lets say for two 5970's it will equal about $50 in electricity per month around where I am. It could be $100 in other parts, make sure you do the calculation.
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February 18, 2011, 05:34:38 AM
 #14

or just get one of these...

http://www.p3international.com/products/special/P4400/P4400-CE.html

and then do the math on your last utility bill.

itll at least get you to within a penny or 2.

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uck
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February 28, 2011, 02:57:46 AM
 #15

What if casinos added background mining to their slot machines?

error
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February 28, 2011, 02:59:21 AM
 #16

What if casinos added background mining to their slot machines?

It will still increase the power draw of the CPU or GPU doing the work. Multiply that by a few hundred slot machines, and it doesn't look like such a good idea anymore.

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Quip
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March 01, 2011, 01:47:33 AM
 #17

You could get one of these and five of these for under $1200 USD and generate enough power to fuel your average miner.

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Garrett Burgwardt
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March 01, 2011, 01:48:27 AM
 #18

500w is pretty low for multiple 5970s
sandos
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March 01, 2011, 08:38:57 AM
 #19

Uh, 500w nominal. Good luck.

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Quip
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March 09, 2011, 02:39:15 AM
 #20

I said average. Does everyone but me have 5970s now?

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