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NeonFlash
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September 19, 2011, 02:31:22 PM
 #1

I just came across Bitcoin and I am new to it.

I have registered on Deepbit.net Pool and I am using GUIMiner software running on Windows 7.

I logged in using my Deepbit credentials. However, I am confused about the Bitcoin address?

On Deepbit.net under statistics, it asks for my bitcoin address. Where do I get that?

Do I need that address to get bitcoins? Currently, I don't have the bitcoin client installed on my machine. Only GUIMiner and I am directly connecting to the Deepbit.net pool.

I am getting an average speed of 80M Hashes/sec which I suppose is ok? Reward Estimation says, I'll earn 0.04 BTC in 24 hours. That's very less.
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Alex Fenner
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September 19, 2011, 04:11:47 PM
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Register at https://Mtgox.com
and get a bitcoin address there

Or get the bitcoin program and get a address from there
nmat
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September 19, 2011, 04:22:16 PM
 #3

Your earnings will stay at Deepbit. You can keep them there or you can transfer them. If you want to transfer them, you need an address. So you can either download the bitcoin client, get a new address and save your earnings in your computer or you can sign up at a website such as TradeHill or MtGox and move your coins there.

Depending on your graphics card, 0.04/24h might be realistic. Take a look here:
https://en.bitcoin.it/wiki/Mining_hardware_comparison

and enter your hashrate here:
http://bitcoin.web-share.nl/
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September 19, 2011, 04:29:56 PM
 #4

To move bitcoin you need an address.

If you want to move them in mtgox you can register an account on them and move them there.

Or if you want you can install the bitcoin client and you will get as many address as you wish, if you use that then the bitcoins will be stored in your wallet.dat file.

IF YOU LOSE THAT FILE YOU LOSE THE BITCOINS INSIDE IT, so backup it and pay attention that NO ONE STEAL IT, otherwise they can move the bitcoins to another address and then there is no way to recover them.
NeonFlash
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September 19, 2011, 04:37:08 PM
 #5

Thanks for the detailed replies guys, now I am clear with this concept.

Also, regarding the speed. I think I have a decent hardware. I am running an ATI Radeon 6770M GPU which is fairly recent. Though it has only a single GPU Core but 80M Hashes/sec is a decent speed. I have made use of it to do Hash Cracking with oclhashcat tools and it works good.

I went to this site, http://bitcoin.web-share.nl/

Entered 80M Hashes/Sec and Chose USD as the currency.

Below are the results and they look  Huh Huh Huh

Your hash-rate:   80000000 hashes/second
Difficulty:   1755425.3203287 times difficult than difficulty 1
Exchange Rate:   $0,00000000/BTC
Block time:   2 years, 11 months, 3 weeks, 4 days, 12 hours, 14 minutes, 52 seconds/block
Network total:   12,063 Thash/second

per Second   0,00000053 BTC    $0,00000000
per Hour   0,00190991 BTC    $0,00000000
per Day   0,04583792 BTC    $0,00000000
per Week   0,3209 BTC    $0,0000
per Month   1,393 BTC    $0,00
per Year   16,742 BTC    $0,00

Questions:

Why does the exchange rate show up as 0 Dollars?
What is meant by Difficulty? I keep coming across this term and not sure what it means?
By looking at the stats generated by that site above. If I run my GPU for 1 year, all I get is 16.74 Bitcoins??

I don't seem to understand then how does one go about earning 10-15 Bitcoins on a daily basis?

Since I am logging in to the Deepbit Pool and mining for them, I guess, I should be getting better returns. Kindly enlighten me more about it. I liked the idea of Bitcoin a lot but I am trying to understand how it can be effective for someone.

Not everyone can have 6 GPU's working in parallel just for Bitcoin Mining!

Thanks for taking the time to answer my questions.
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September 19, 2011, 04:57:11 PM
 #6

Why does the exchange rate show up as 0 Dollars?
What is meant by Difficulty? I keep coming across this term and not sure what it means?
By looking at the stats generated by that site above. If I run my GPU for 1 year, all I get is 16.74 Bitcoins??
I don't seem to understand then how does one go about earning 10-15 Bitcoins on a daily basis?

Not everyone can have 6 GPU's working in parallel just for Bitcoin Mining!

The exchange rate shows up as 0 dollars because the website appears to be broken.  Check http://bitcoincharts.com for current exchange rates.

Mining is essentially doing lots fo calculations per second hoping to get lucky and find a winning result.  The p2p network adjusts how difficult it is to find the winning result based on how many people are all simultaneously doing calculations.  The idea is to keep the rate of winners (i.e. blocks being found) to be about 1 per 10 minutes across the entirety of the p2p network.  As more people start mining, the difficulty goes up.  As people quit mining, the difficulty goes down.

Yes, at 80 MH/s, you'll make only approx 16 BTC over the course of a year (assuming the difficulty doesn't change during that year--which is not a realistic assumption).

People who are making 16 BTC per day have a lot more hardware than you.  Dozens of machines each with several GPUs running in parallel. 

Bitcoin mining is not a system to make loads of free money with little/no investment (at least not anymore).  Pretty much any hardware purchase is going to take 6 months or more to pay itself off at this point.

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nmat
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September 19, 2011, 05:21:20 PM
 #7

I'm sorry. That calculator seems to be broken. Try this one: http://tpbitcalc.appspot.com

The 6770 should give you a little more than that. Have you tried those flags that appear in the wiki? https://en.bitcoin.it/wiki/Mining_hardware_comparison (check the last column)

Just to add on what twmz wrote: difficulty is adjusted every 2016 blocks (~2 weeks) based on the performance of the network during that time.

Mining is barely profitable right now. In some places where the electricity is high you will even lose money.
P4man
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September 19, 2011, 05:58:18 PM
 #8

A 6770 is new, but its medium/low end card. Hence the hash rate isnt great.
On the bright side, it doesnt use a lot of electricity.
Mining isnt going to make anyone rich  anymore, or not until bitcoin prices bubble in to the stratosphere for a while. A few months ago it was lucrative, as the price was really high (5-6x higher than today) and relatively few people where mining. It actually made sense to buy hardware for this purpose; lots of people made small racks at home with dozens of GPUs. But tHe word spread, everyone started mining now, difficulty went up and price collapsed. In short, like me, you joined too late Smiley

NeonFlash
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September 20, 2011, 08:53:05 AM
 #9

Thanks for the info guys.

I will try mining once again using the flags: -v -w128

Let's see if I am able to get better Hash rates or not.

I agree with you, P4man. Maybe we stepped in for mining a little late. But, it's really interesting as a concept. And I am still learning more about Bitcoin every moment.

At present, I see the exchange rate as, 1 BTC = 5.8 USD.

1 Block = 50 BTC = 50 * 5.8 = 290 USD

But it takes us more than 2 years to make 1 block with the current difficulty rate.

@twmz: You mine @2.5 GH/s. I am interested to know about your hardware configuration, how many BTC you earn every day?  Cheesy

What's the price of electricity in your location?

Is there a thread dedicated to Bitcoin Mining Rigs?

Even though, we stepped in for mining a little late, I still see a fair chance right now. Compare it to the P2P networks like Torrents.

Today, 100/100 people are aware of Bit-torrents but only 2/100 people are aware of Bitcoins. Just an approximation.
twmz
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September 20, 2011, 11:16:06 AM
 #10

@twmz: You mine @2.5 GH/s. I am interested to know about your hardware configuration, how many BTC you earn every day?  Cheesy

What's the price of electricity in your location?

Is there a thread dedicated to Bitcoin Mining Rigs?

I have 2 dedicated mining rigs.  The first has two 6970 GPUs.  The second has two 5970 GPUs and 1 6850 GPU.  I also mine on my Mac Pro (which has a 5870 in it) when it is idle.

I pay $0.097 per kWh.

There is an entire subforum dedicated to mining hardware.  Not sure if you can see it prior to getting released from Newbie status.

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NeonFlash
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September 20, 2011, 11:35:25 AM
 #11

Thanks for sharing the details of your rig Smiley

How many BTC do you earn on an average in let's say, 1 week? I am ready to invest more in building a powerful mining rig similar to yours and be an active Bitcoin Community user. However, I want to know more about the profits.

How much time did it take you to recover the cost of your hardware?
P4man
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September 20, 2011, 12:11:16 PM
 #12

You can calculate your revenues here:
http://www.alloscomp.com/bitcoin/calculator.php

Please note, difficulty is variable, as more people mine it goes up (and vice versa). Obviously bitcoin value is very volatile too.

Bottom line is, unless you have very cheap (or free) electricity, its not likely mining will be economically viable, particularly not when you have to account for hardware purchases. Its simple market dynamics, if its profitable for you, its profitable for others, and so more people will mine, driving down your revenue. Unless you have a competitive advantage over most other miners (free electricy, spare mining rigs, FPGAs, ..) , you will in the long run only be marginally profitable (or not, depending how many people dont mind mining  at a loss).

nmat
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September 20, 2011, 01:31:01 PM
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Thanks for sharing the details of your rig Smiley

How many BTC do you earn on an average in let's say, 1 week? I am ready to invest more in building a powerful mining rig similar to yours and be an active Bitcoin Community user. However, I want to know more about the profits.

How much time did it take you to recover the cost of your hardware?

The time to get the investment back is usually around one year, depending on your electricity cost. Use a calculator to get more accurate numbers.

The problem is that no one knows what will happen a year from now. For example, if someone comes up with custom hardware for mining (FPGA/ASIC), the difficulty will rise a lot and you may never get your money back.

The Bitcoin price is another important variable here. If it drops to $2, you are screwed.
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September 20, 2011, 03:27:39 PM
 #14

The Bitcoin price is another important variable here. If it drops to $2, you are screwed.

Thats actually not true, not as such. If it drops to $2 and everyone stops mining because its not worth it, difficulty will drop and it may become marginally profitable again. Likewise even if bitcoins rally to $100, its possible within a short amount of time there will be so many people mining that difficulty goes up equally and its still not profitable.

Obviously there is a delay between bitcoin price and difficulty, and there is an upper limit (there is only so many AMD cards out there) and a lower limit (Im sure some people will continue mining no matter the price), so all this  probably means that at $2 it wont be worth it for at least a while, and at $100 it will likely be lucrative for a while, but in the long run, BTC price doesnt really matter.

NeonFlash
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September 20, 2011, 04:05:03 PM
 #15

This is interesting. I guess this trade off between price and difficulty is what will keep Bitcoin Mining going on forever.

If the price of BTC goes up in exchange, more people will mine and so difficulty goes high. So, you end up with lesser BTC. Some get bugged up and lose patience and quit. It brings down the difficulty.

Question is, what determines the price of BTC in the exchange? If it's related to the difficulty and the price is adjusted according to it then I see no point.

Higher difficulty means, they can safely increase the value of BTC. So, they are one and the same thing.

I agree, mining is going to be profitable only to those with spare mining rigs and almost free electricity.
NeonFlash
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September 20, 2011, 04:10:35 PM
 #16

Just to add. I tried with the flags, -v -w128 and it does bring up the Hash Rate.

Now, I am getting a speed of 90 Mhash/sec with an ATI Radeon HD 6770M GPU.

I checked the price of ATI Radeon HD 6990 and 6970 today. It's not possible for me to invest in such high end GPUs at the moment.
P4man
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September 20, 2011, 04:42:30 PM
 #17

Question is, what determines the price of BTC in the exchange? If it's related to the difficulty and the price is adjusted according to it then I see no point.

Price of BTC is purely supply and demand. What generates demand is trade in BTC and speculation. At this moment a whole lot of speculation and relatively little trade.

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September 20, 2011, 07:08:16 PM
 #18


Question is, what determines the price of BTC in the exchange? If it's related to the difficulty and the price is adjusted according to it then I see no point.



Easy, it's based on how much people spend to buy bitcoins from someone else.
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September 20, 2011, 07:19:24 PM
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Question is, what determines the price of BTC in the exchange? If it's related to the difficulty and the price is adjusted according to it then I see no point.

There was a thread somewhere relating prices to difficulty with some nice graphs (I'll post it here when I find it), but I think it was inconclusive. I think price and difficulty and not very related. Difficulty is based on mining rig investments (this could be connected with price indirectly) and price is mainly based on speculation.

One thing that you must consider here, is that miners made heavy investments in hardware around June/July and they want to get their money back. Considering that Bitcoin is highly inflationary right now (50 new coins every 10 minutes) we need a lot of money coming into the markets each month. If miners are selling 30 coins out of each block, for example, we need around 1 million dollars a month to keep the prices at $5.

Maybe there are miners that don't sell below $4, but I have also seen people with lower electricity costs stating that until it hits $1, it is still profitable to sell.
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