MINING IS NOT PROFITIBLE

[ronaldmaustin]

I listened to all of these stupid projections on here and spent thousands of dollars on high end ATI graphics cards and computer systems to house them in.  Thus far I have gotten back only pennies on the dollar and now the difficulty is twice as hard and increasing every week!  The price of Bitcoins is plummeting.  I have lost everything.  The car, the house, the wife, the kids.  I think the people hyping this whole thing own stock in ATI and are doing this just to get people to buy the cards and make money for themselves.  They don't care about the little guy.

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[ronaldmaustin]

Okay, a dozen reads and no replies.  No one bought it.  But I seriously do think there is a closing/closed window of opportunity here.  At the end of all this there's going to be a whole lotta people on this fourm looking for uses for all that computing power.  How about a new subsection, "What to do now with your 5970/5870"?  Some people use it for cracking WPA keys [http://www.elcomsoft.com/ewsa.html], some for SETI and Folding at home (though I doubt anyone is going to spend hundreds in electricity to help search for aliens)[http://tinyurl.com/66x46hd], some unlock cellphones [http://www.cellphone-tutorial.com/2010/12/mxkey-now-supported-sl3-unlimited.html], etc.  Does anyone have any idea whether programmers will be writing programs to use CUDA and OPENCL to make everyday tasks, like zipping/unzipping files, faster?  Any other applications for these cards?  How about turning the pooled miners into pooled supercomputers and renting out the time to governments?

[darvil]

This thread should be pinned.  Love it.

[Cryptoman]

I plan to keep my miners running until they fail.  I don't think it makes any sense to invest in additional equipment, however.  It will be interesting to see how the fees evolve.  I've received as much as 0.05 per block lately.

There will always be plenty of gamers willing to absorb the surplus GPUs.

[sturle]

There is some truth to this.  Since some have very cheap or free electricity, the price of coins will eventually fall below the cost of producing them for most people.

To compete with this you need to use the electricity twice.  I threw out the big resistor in my bathroom floor, only producing heat from electricity, and instead use my miner to heat the floor.  I get back double for my electricity.  Bitcoins and heat where it is needed.  This is a low scale operation, of course.  I am planning to add another card to get more heat in very cold periods, and capacity to pre-heat my hot water as well.  Hot water and bitcoins for the same amount of electricity as only hot water.  Eventually the cards will pay themselves back (may take a long time), but the electricity is basically free.  I would have used the same amount of electricity for heating my bathroom or hot water if it was heated by a standard electric heater instead of my miner.

[true]

If people fall out because it isn't profitable, then difficulty hopefully won't rise as fast as it has been.

Though I am doubting this.

I'm personally throwing a lot of power and money at the network, and project that worst case (slightly worse than current) difficulty rate increases, and a .50/bitcoin threshhold, my investment will be paid off in 2 months...but who knows, maybe my projections are bad?

At least I'll have lots of kickass LAN gaming computers that mostly paid for themselves. (Already 75% there and collected...)

[ribuck]

Does anyone have any idea whether programmers will be writing programs to use CUDA and OPENCL to make everyday tasks, like zipping/unzipping files, faster?  Any other applications for these cards?

Have a look at the "examples" directory that got installed with your ATI SDK, and you'll get a feel for the breadth of applications for these boards.

Also, don't forget, if the difficulty rises too high you can probably sell the GPU card second-hand and get back half what you paid for it. That might be enough to make the venture profitable overall.

[Raulo]

I'm personally throwing a lot of power and money at the network, and project that worst case (slightly worse than current) difficulty rate increases, and a .50/bitcoin threshhold, my investment will be paid off in 2 months...but who knows, maybe my projections are bad?

That's impossible. At current difficulty level without any further increase, you get 18.09 BTC per 1GHash/s per day = 1085 BTC per 2 months. It's not easy to build a 1GHash/s rig with $1000 if you count not only graphics cards but the rest of the system and with half of that it is impossible. Of course it is barely profitable if you assume, you can sell the rig at half price in 2 months and no difficulty increase.

I made a graph of daily mining income per day per 100Mh/s
http://bitcoin.atspace.com/income.html

and the current income per day is hair above lowest ever. If the BTC prices stays the same, it will make the difficulty increases slower (but by no means constant) as it no longer that profitable and less and less people will jump the mining bandwagon.

[markm]

Maybe we are approaching a time when a market value for hashing work can be figured out, so any applications considering using a blockchain approach to something will know how much miner work they can buy for how many bitcoins, dollars, lire, or whatever miners might accept in payment for mining.

A blockchain that simply replaces bitcoin's genesis block and leaves the rest of "how it works" unchanged should produce on average 50 whatevers per ten minutess = 300 per hour etc. By comparing that to the price of miner work they could figure out how much they need to bring in by whatever means in order to be able to afford how much mining work.

They might also question the economic utility of opening their network to random @home miners and seek to research whether the amount of information a hired miner would need in order to mine is too much information to allow out of their hands.

Once a miner does a getwork of work for you, do they know enough to force themselves onto your network mining more than you wish them to mine or faster or harder than you wish them to mine? Or could one set quotas, this mining company we will buy this much work from, this other company maybe more or less?

-MarkM-

[Dude65535]

At the very least the profit from mining might set a value for donating computer power to projects like folding@home. Then you might be able to get a tax deduction for donating computer time.

[JWU42]

At the very least the profit from mining might set a value for donating computer power to projects like folding@home. Then you might be able to get a tax deduction for donating computer time.

That is a very interesting thought!

[true]

I'm personally throwing a lot of power and money at the network, and project that worst case (slightly worse than current) difficulty rate increases, and a .50/bitcoin threshhold, my investment will be paid off in 2 months...but who knows, maybe my projections are bad?

That's impossible.

No, it's not. It is if the machines had no purpose for me other than BTC, I didn't get epic deals on the hardware, and I was starting from zero balance. I already had a small amount of BTC to start with, and not only that, I already had some of the hardware and with its daily active use doing other things than bitcoin, already consider it paid off. It's perspective, not hard numbers. The *new* hardware I bought I will consider paid off. And again, this is considering worst case projections...things aren't looking quite that bad.

But of course people will argue stupid shit here. Which I'm perfectly fine with actually, there's been some interesting viewpoints brought up because of it. At least you read the post and put some thought to it.