This isn't really news. I did the math a month ago and came to the same conclusion. That I could probably make a little money if I don't mind heating up my house (costing more in AC costs) and dealing with the noise of the computers running all the time.
The projected profits, at the prices that day, were pretty sad.
A week later I learned that the better the machines and programs get at producing bitcoins, the harder it is to actually earn one, so the machine works harder for the same output. (The whole market is in on this, not just 1 machine, so it's possible to be ahead of the pack... But they -will- catch on eventually.)
At that point I realized that even if I built a perfect rig that paid for itself every 3 months, I would have to continuously upgrade it to keep up with the market.
>...if I don't mind heating up my house (costing more in AC costs) and dealing with the noise of the computers running all the time.
Have there ever been any cases of miners being raided by the police? Because these sound like similar problems faced by another profitable cottage industry that crosses my mind...
He mentions the power usage, people do get reported over that. However the police also check for unusual heat signatures coming out of buildings at night, that could also have been what happened.
Interestingly, in some jurisdictions (notably canada) looking through someone's roof with an IR camera constitues an invasion of privacy, and requires a warrant.
Looking forward to the future when Bitcoin gets banned, and we see documentaries with police officers breaking down makeshift barricades to gain entry to innocuous looking barns way out in the countryside, pulling back layers of plastic sheeting to find a state of the art datacenter inside, with racks of clustered GPUs, and one very dishevelled looking vietnamese nerd sleeping on a bare mattress.
However the police also check for unusual heat signatures coming out of buildings at night, that could also have been what happened.
Uh, wtf, since when? They're allowed to do this without a warrant? They just randomly drive along the streets and check heat signatures?
Looking forward to the future when Bitcoin gets banned, and we see documentaries with police officers breaking down makeshift barricades to gain entry to innocuous looking barns way out in the countryside, pulling back layers of plastic sheeting to find a state of the art datacenter inside, with racks of clustered GPUs, and one very dishevelled looking vietnamese nerd sleeping on a bare mattress.
That'll happen soon and it won't be just for BitCoin, it'll be for any p2p network or any encrypted network since the governments of the world are all going censorship crazy at the moment.
> Uh, wtf, since when? They're allowed to do this without a warrant? They just randomly drive along the streets and check heat signatures?
"Emissions" are part of a Constitutional gray area because of the murky definition of privacy, but generally cops are allowed to utilize them. Heat signatures are not placed in the same category as wiretaps, but rather in the same category as walking down the street and happening to see something through someone's open window. The reasoning is that the heat information is "broadcasted" and therefore publicly available.
And the cops don't cruise around examining heat signatures. They do fly-overs. That, and stake-outs.
> Uh, wtf, since when? They're allowed to do this without a warrant? They just randomly drive along the streets and check heat signatures?
There were pictures in an article I saw talking about one such raid that was taken from the air, so they are probably doing it from police helicopters. It makes sense - if you have the thing in the air anyway (perhaps returning to base having helped out with some chase) make better use of the fuel it is consuming by sweeping the IR cameras around on the offchance of spotting something odd.
Any yes, in many (but not all) jurisdictions this is something they can do without a warrant.
Those BitCoin miners could also be good gaming PCs. Once I take mine out of action, it will simply be a gaming PC that paid for itself. I actually bought a gaming PC off ebay for mining - of course if you just bought a crappy PC with a fast graphics card it might be different.
Why buy a new machine after 3 months? Once it makes back it's cost, wouldn't you still be able to earn money from it so long as it can cover the cost of running and storing it?
Because as everyone else joins and upgrades, the difficulty of mining gets increased to match, and after a few months that machine is no longer efficient enough to pay for its electricity and cooling.
Yeah, that's the bit I learned a week after doing the calculations. When people first started, they were using CPUs. When GPU usage became available, CPU-miners became so horribly inefficient that electricity cost alone killed them.
Now, granted, I can't imagine anything being that much better than GPUs, but new GPUs are usually much more efficient than old ones, and they come out all the time. It could quickly became an arms race just to break even.
On top of that, apparently there's also a built-in cycle that makes it harder even if the machines don't change. The linked article touches on that briefly as part of his decision.
FPGAs and ASICs are in use by a few people/companies. They have the opposite cost structure of GPUs. The two main measures are MegaHash per $ and MegaHash per Watt, roughly analogous to fixed expenses and operating expenses though the MH/Watt also influences investment in power and cooling infrastructure. GPUs have a high MH/$, but a rather poor MH/W.
I own 2 Radeon 5830s, $110 each, that still spit out about $5 a day at current prices making for a rather impressive rate of return in spite of high power requirements. From what I have read, FPGAs require about an order of magnitude higher capital investment with the benefit of a drastically reduced power consumption. Last I checked about 6 weeks ago, a decent GPU rig could pay for itself in a month or two, while an FPGA setup could pay for itself in about a year. The tradeoff is that the GPU rig's payout may dip below power costs before it pays itself out (likely the case for any rigs purchased in the past month) essentially betting on the short term difficulty increases, while FPGAs are betting on the long term health of the bitcoin system itself.
FWIW, the newer ATI GPUs aren't as good for mining as the older 5800 series.
I was a PoliSci/CompSci/Econ mega-nerd in Uni, so Bitcoin is my fantasy come true.
No, because of the increased difficulty. However, nobody said anything about buying a new machine. It should be sufficient to upgrade the graphics processor...
I think there was an edit in the parent from something like "new machine" to "upgrade" while I was writing the reply. Of course, I could've misread it too.
The projected profits, at the prices that day, were pretty sad.
A week later I learned that the better the machines and programs get at producing bitcoins, the harder it is to actually earn one, so the machine works harder for the same output. (The whole market is in on this, not just 1 machine, so it's possible to be ahead of the pack... But they -will- catch on eventually.)
At that point I realized that even if I built a perfect rig that paid for itself every 3 months, I would have to continuously upgrade it to keep up with the market.
It's simply not worth it.