YouTube Video: Bitcoin Mining: Three Months Later

[casascius]

I created a YouTube video to describe my experience with mining as well as buying lots of Bitcoins when they were 80 cents.

Excuse the amateur production and my wobbly hand with the iPhone.  Otherwise, enjoy!

http://www.youtube.com/watch?v=BzBCbO8U45w

[Dayofswords]

I fiddle around since late 2010, i only have 9BTC so far...

Do not have the funds for serious mining...

EDIT:I want your graphics cards lol

[mewantsbitcoins]

Cool man. Thanks for the video 

[nebiz]

Great video!  Nice investment!

[OVerLoRDI]

I have very jealous of your electricity rates.

I paid .158 up until may.  Now till October I pay .218

[Raize]

Casascius, you probably account for most of the reason why BTC has rebounded so sharply. First you bought a lot of BTC, then you started mining professionally so that the other single GPU miners and CPU miners couldn't make as much as they used to. This was like a double-whammy to the BTC flow which is why people are willing to pay $8 per coin today.

I'm concerned whether or not you're going to be kicking yourself for not selling BTC sooner if MtGox goes down and the price of BTC crashes.

I can tell you guys this, when the price flows like it has been, there's FAR too much wealth concentrated in one location. If MtGox is physically shut down and raided anyone who has even a penny in there is going to lose it forever. We should watch legislation like hawks for any new bills being signed that might make a raid on the exchange legal, because once it's confiscated, ain't no one going to get it back and the lamentations we hear because of it will ensure NO ONE buys BTC for a very very long time.

[casascius]

Casascius, you probably account for most of the reason why BTC has rebounded so sharply. First you bought a lot of BTC, then you started mining professionally so that the other single GPU miners and CPU miners couldn't make as much as they used to. This was like a double-whammy to the BTC flow which is why people are willing to pay $8 per coin today.

You make me out to be a far bigger fish in the sea than I am.

When I bought that equipment, I probably constituted about 2-3% of the entire Bitcoin network.  Remember, there are only 144 blocks awarded per day, and if I'm scoring three or four of them a day, well, what percentage is that?  You do the math.  Today, there are still 144 blocks a day, but if I score one every other day, I must be about 0.3% of the network now.

Amazing isn't it?  BTC value is up by a factor of 10, and mining output is down by a factor of 10... meaning mining is just as profitable to start today as it was when I started in February.  I am convinced that this ratio will stay in equilibrium due to the "should I buy or should I mine" thought process.

Certainly, my wind of three or four percent is not responsible for the 1000% growth of Bitcoin over the past three months.

I'm concerned whether or not you're going to be kicking yourself for not selling BTC sooner if MtGox goes down and the price of BTC crashes.

Who says I'm not selling?  I have been selling little bits this whole time.  Look at the OTC board.  Want to buy some?  I am down to about 18,000 BTC.

I can tell you guys this, when the price flows like it has been, there's FAR too much wealth concentrated in one location. If MtGox is physically shut down and raided anyone who has even a penny in there is going to lose it forever.

MtGox is operated from Japan.  What you say could be true about dollars (one could in theory shut down MtGox's bank account and make him dollar insolvent) but not true about Bitcoins (which are stored in the block chain, not in any physical location, and as long as he keeps his wallet file backed up, no "raid" can take it).  If that bothers you, don't keep dollars in MtGox.

We should watch legislation like hawks for any new bills being signed that might make a raid on the exchange legal, because once it's confiscated, ain't no one going to get it back and the lamentations we hear because of it will ensure NO ONE buys BTC for a very very long time.

Look at what happened to Wikileaks.  They tried to shut down wikileaks.org, and 1400 new mirrors popped up overnight.  MtGox doesn't have a monopoly on the Bitcoin trading market, someone could start a viable competitor tomorrow and be in business easily.

[psknives]

I'm so jealous, if I knew about bitcoins about 1-2 months ago I would have bought $1000 worth of BTC and then I would sell it now... I would be making 7 grand in just 2 months.

[casascius]

I'm so jealous, if I knew about bitcoins about 1-2 months ago I would have bought $1000 worth of BTC and then I would sell it now... I would be making 7 grand in just 2 months.

But you would have faced the exact same uncertainty and risk as you would if you contemplate buying $1000 worth of BTC today.  The only difference is the location of the decimal point.

It's all too easy to see a roulette wheel stop on red, and say, "I should have bet on red".  Of course that is not how it works.

[koin]

But you would have faced the exact same uncertainty and risk as you would if you contemplate buying $1000 worth of BTC today.

that is oversimplifying and incorrect, in my opinion

the demand might have come from early adopters.  now that they've gobbled up theirs, will growth stall without another group who are nearly as eager?

[bitcool]

To buy or to mine? man, we faced same question, same thought process and came to same decision.

The only difference is you have bigger balls, you did everything on a larger scale. I guess that's true for everything in your neck of the woods.

EDIT: Don't be alarmed, I have your zip code b/c once I was seriously considering buying your mining hard drives. 

[marcus_of_augustus]

But you would have faced the exact same uncertainty and risk as you would if you contemplate buying $1000 worth of BTC today.

that is oversimplifying and incorrect, in my opinion

the demand might have come from early adopters.  now that they've gobbled up theirs, will growth stall without another group who are nearly as eager?

... the demand for digital money that is easy, near zero cost, to transfer, limited in issuance and pseudo-anonymous is difficult to estimate.

However, let's just say that there are more than 100,000 people on the planet of 7 billion that might like to use this .... run the numbers, the current exponential growth could go on for a long, long time ... us here now could be considered the "early adopters" after another 18 months of exponential growth ... it's difficult to get your head around the potential size of the shift in wealth/money perceptions that is possible, for anybody.

Life of its own now, enjoy the ride.

[EPiSKiNG]

Awesome video.  What motherboards and PSU are you using for your rigs?

-EP

[Steve]

Nice video...glad to see the update.  It's an interesting dynamic in that when the price of bitcoins is rising at a fast enough clip, it's better to just buy bitcoin...and when the price levels out, the difficulty will likely catch up very fast and erode profits.  I viewed it the same way you did, a lower risk way of obtaining bitcoins.

Look at what happened to Wikileaks.  They tried to shut down wikileaks.org, and 1400 new mirrors popped up overnight.  MtGox doesn't have a monopoly on the Bitcoin trading market, someone could start a viable competitor tomorrow and be in business easily.

Heh...well, I think there are already a half dozen or so fully operational competitors to mtgox.  I think the key at this point is to expand the usage of bitcoin enough to where buying locally for cash is viable.  At that point, every electronic means of getting money into any exchange could be shutdown, but you could take a wad of cash out of the atm and find someone locally to buy from.

[rezin777]

I created a YouTube video to describe my experience with mining as well as buying lots of Bitcoins when they were 80 cents.

Excuse the amateur production and my wobbly hand with the iPhone.  Otherwise, enjoy!

Thanks for sharing your experience with Bitcoin.

[TehZomB]

Thanks for the sharing and update! However:

protip: never never never let your address out. hehe.

[bulanula]

LOL you have made your fortune using BTC !

Had 25 000 so that is about 250 000 considering 1 BTC = 10 USD.

Nice !

Care to explain what hardware you are using ?

Thanks !

[Hawkix]

I wish I had as long kitchen as yours. Then, I would not have to mine inside my living room, fighting with noise and heat.

[grndzero]

I wish I had as long kitchen as yours. Then, I would not have to mine inside my living room, fighting with noise and heat.

I watched your video, and the one other bitcoin rig video on youtube at the time, before I decided to buy some dedicated hardware. Unfortunently I didn't have the money to go all out with 2 5970's right off the bat.

[Raize]

Look at what happened to Wikileaks.  They tried to shut down wikileaks.org, and 1400 new mirrors popped up overnight.  MtGox doesn't have a monopoly on the Bitcoin trading market, someone could start a viable competitor tomorrow and be in business easily.

Wikileaks does free dissemination of information. MtGox holds actual Bitcoins and US Dollars which would be confiscated.

The fact that so few Bitcoiners realize how easy it is for someone to sue MtGox and get a judicial injunction (US, Japan, anywhere) thus holding up thousands of EVERYONE's money is a testament to how horrible a crash is going to affect the community. I'm sorry for those of you who don't understand this.