What am I missing?

[evild614]

This is a stupid question- not a coder or programmer, but I was looking into learning the ropes and maybe doing this for some extra spending cash.

I was looking on this chart: https://en.bitcoin.it/wiki/Mining_hardware_comparison and I saw that you can buy a usb mining thingie for 140 bucks or so that says it can do about 2.5 Ghash/sec.

I plugged 2.5 Ghash/sec into this calculator: http://www.coinwarz.com/calculators/dogecoin-mining-calculator 2621440 kHash in a Ghash, 2621440 into the Dodgecoin calculator, and it spat out an estimated annual profit of 10.7 million dollars.

So what is off in my calculations here? Obviously, if this were accurate, 10.7M annual profit for an investment of $140, it would be front page news and everyone would be doing it.

What am I doing wrong, and realistically, what sort of money could one actually expect from a cheap USB miner like Blue Fury doing altcoins like Dodgecoin or Tagcoin?

Or am I off base here, is it not possible to use such a device on altcoins?

[Chancellor]

You've missed the fact that Dogecoin uses different proof of work algorithm. Bitcoin uses double SHA-256, while Doge uses scrypt. Then you cannot use SHA-256 miner for Doge, consequently GHash/s has no meaning for scrypt based altcoins.

[evild614]

There's my big mistake, thank you. So from what I can tell, scrypt coins are listed on CoinWarz as much more profitable per hash than SHA-256 coins, but you can only do a fraction of a percent as many hashes. And there are no cheap, simple mining devices you can plug into your USB to mine scrypt coins super-efficiently.

So basically, mining alt-coins, both SHA-256 and scrypt, all come out about evenly with bitcoin in terms of profitability, which is to say not at all profitable.

Am I starting to get the picture more clearly now?

[Chancellor]

So basically, mining alt-coins, both SHA-256 and scrypt, all come out about evenly with bitcoin in terms of profitability, which is to say not at all profitable.

Am I starting to get the picture more clearly now?

Yes. SHA-256 is easy implemented in programmable logic chips (FPGAs) and also custom-made chips (ASICs). Then mining of SHA-256 based coins is nowadays only profitable with mining rigs based on ASIC technology, plus solo mining makes no sense if you want to get some real profit from it. Scrypt has been designed to rule out FPGA/ASIC technology, as it requires large amount of memory (128 kB per mining unit), or calculating many numbers (these 128 kB) on-the-fly, which slows the hashing rate. Then scrypt coins may be mined with graphics cards (GPU) with some profit, while for SHA electricity costs for GPU mining make it unprofitable. On the other hand mining of new altcoins is risky, as they may fail to achieve any real value, also selling them may be not easy, until a coin enters some exchanges.