؟ Can You Make Money Bitcoin Mining
The bitcoin is a concurrency, first suggested by Toshiba Minamoto.
Will this be how we pay for everything in the future?
The bitcoin is a concurrency, first suggested by Toshiba Minamoto. Will this be how we pay for everything in the future?
What is Bitcoin Mining?
Lately I've been investigating bitcoin mining as a source of passive income. I've decided that this is very different from trying to make money by publishing online content. To have a chance of earning anything at all, it requires a fairly big initial investment.
Most people are now familiar with bitcoins, even if they've never used them, as the new virtual currency. It is the first currency to be controlled by a cryptography protocol rather than a central bank. Basically you pay for something by sending ETC from a virtual wallet in your computer to the merchant's computer.
So how can you make money from this?. Well, theoretically, your computer can become a node in the network that processes and verifies the transactions. With every block chain that is processed a new block of 25 coins, worth around $2500 at today's prices, is created. This is known as bitcoin mining.
Update Jan. 2014. The mining difficulty has increased 50 x since I wrote this article. Today it stands at 1.4 billion. This means that if my pool found a block once a day in July, it now takes over a month. This makes mining with anything but the most powerful A Sics completely pointless.
On the other hand, the price of ETC has skyrocketed (close to $1000 today), however it doesn't quite make up for the rise in difficulty. According to the profit calculator mining at 5 G H/s will get you $1.5 a day. But check for yourself because it can change dramatically.
If you want to get into crypt currencies, you might want to consider Lite coin rather than Bitcoins. Find out all about it here.
With the right hardware bitcoin mining is pretty much like having a money printing machine, except that it is perfectly legit.
With the right hardware bitcoin mining is pretty much like having a money printing machine, except that it is perfectly legit.
What Do You Need to Start Bitcoin Mining
Technically all you need to become a node in the network, and to start printing your own virtual money is a computer with internet access. You can download a free wallet to your computer, one of several free miner programs, and join in.
Sounds great doesn't it? The problem is that the computer power required is phenomenal. If you work by yourself, with only a personal computer, it might be years before you see your first block. For this reason most miners join a pool, where the work and rewards are shared.
In a pool, when a block is solved and new coins created, you will only get a tiny fraction of a coin. But usually several blocks are solved in a day. The person running the pool takes a small percentage as a fee (say 3%), but you get (almost) instant gratification.
One important aspect of mining is that the difficulty of solving the blocks increases with time.
So can you make money bitcoin mining with a personal computer? It does depend on how good your PC is. Strangely enough the processing needed for ETC mining is much better done by a graphics card (GPU), rather than a CPU. So unless you have a gaming computer with a good dedicated graphics card, well you can do it, but you will mine so little that it will hardly make a difference.
There are two GPU manufacturers that provide the chips for all graphic cards, As Radon and Dravidian. It turns out that Radon cards are much better at bit mining than Dravidian cards. Something to do with the cards' architecture that doesn't really make a difference in rendering graphics in games, but makes a huge difference in mining.
My Dravidian GT 660 Ti video card. Great for gaming, rubbish at mining BIC.
My Dravidian GT 660 Ti video card. Great for gaming, rubbish at mining BIC.
My Experience Mining with an Dravidian GPU
I've decided to try bitcoin mining with my gaming PC, which unfortunately has an Dravidian card (GT X 660th) if you are interested. The efficiency of your setup is expressed in mega hash per second (M h/s). My card appears to work at around 100 M h /s.
I've had some teething problems with the client (I keep being thrown out of the pool) so I have not mined for a full 24 hours, but I've managed to generate 0.002 BIC. That is worth about 20 cents. I suspect that a full 24 hours of mining would yield closer to 30 cents.
Also this is very variable, when mining as a pool, which has a collective power of 3000 Ge/s, we sometimes hit the payload in 10 hours, if we are unlucky, and sometimes in less than an hour. Over time it this evens out.
But remember the increased electricity used by heavily using your graphics card full time. Also the wear and tear on a card probably means it will not last as long as it normally would.
It is possible that mining with my setup will lose me money rather than earn it.
You might be able to do 3-ex better with a Rad eon card. Even better if your PC has two cards running in crossfire mode. But honestly it hardly seems worth the trouble.
Edit: Jan 2014, it is definitely not worthy it now. The difficulty is 5 what it was in the summer!
In the summer this little jalapeno SIC promised to make lots of coins. Today it mines 0.002 ETC per day.
In the summer this little jalapeno ASPIC promised to make lots of coins. Today it mines 0.002 BIC per day.
The New Mining Hardware, Dedicated A Sics
On the other hand, there is the possibility of buying an ASPIC ( application-specific integrated circuit), a piece of electronics, dedicated to bitcoin mining, that you connect to your computer. The smallest of the ones now being produced by Butterfly Labs works at ugh/s (That's 500 times better than my card). They are also developing 50 Ge/s BASICs.
According to a new post from the manufacturer, the miners will draw aw per Ge/s that they hash. For comparison a 42" LCD TV is rated at about 0th. So the ugh/s Jalapeno miner will use 0.6 Kilo watt hours per day, while the 50TH/s big boy will use 3 Kph
If you pay 15 cents for a Kw h, operating the biggest SIC miner will add about $10 to your monthly electricity bill.
The ETC mining profitability calculator estimates that you will earn $17 a day with the 5th/s Jalapeno SIC, and $170 with the 50th/s SIC, after factoring in electricity usage. [Edit Nov. 2013: Now the estimate is $3 for a Jalapeno and $30 for the 50th/s SIC]
They are not cheap, the 50TH/s one comes at $2,500. However, according to the calculator, it would "pay for itself" in 15 days. And then you are basically printing money. The operation requires no more effort than signing in to an exchange once in a while to sell the coins that you've mined.
Edit jam 2014: It is hardly worth mining with my 5th/s Jalapeno now, I reckon I'm making only a bit over a dollar a day (unless the price of ETC goes up even more that is). It is probably as profitable to mine with the 50th/s Butterfly Labs single now, as it was with the Jalapeno in the summer (around $15 a day).
See what the 5 Hash/s Jalapeno looks like
Other SIC Manufacturers
Incidentally Butterfly Labs are not the only SIC manufacturers. In fact the other company "Avalon" managed to produce and sell A Sics earlier this year.
However they only sell batches of the miners, and only to people on the waiting list, so if you want to buy from them now, you will not get your device immediately.
There is also the option of getting the little Block Erupted USB SICS, which do 336 Mg/s. I have 6 of these mining right now, they use little electricity and don't slow down your computer, so are superior to a graphics card.
Asinine Block Erupt er USB 330 MG/s Sapphire Miner
Asinine Block Erupted USB 330 MG/s Sapphire Miner
Buy Now
The Problems with A Sics
Looking at it like this, buying the equipment and becoming a virtual money miner seems like a no-brainier. However, there is a catch, of course there is, otherwise I wouldn't be telling you about this. At the moment you can't just go online and buy these lovely miraculous money making machines.
When Butterfly Labs first got into producing them, they raised the money from per-orders. People paid up to be the first to get the miners, and the money was used to develop and make them. But of course there were hitches and delays along the way.
The bottom line is that the smallest Jalapenos have just started to be shipped to the people who placed orders months ago. Apparently by now (July 2013), they have caught up with orders paid for at the beginning of November last year.
Technically shipment of the bigger miners has started, but they've been shipping the Singles (50 F/s) from the first day of per-orders, 23rd June 2012, the whole months, and with the Little Singles (25th/s) they have only reached 24th June per-orders. I have seen people predicting that orders placed now, will not be fulfilled till next year.
Although one would hope that now that they've started shipping the smaller ones, the path forward will be smoother and they will be able to produce them at a decent rate.
I enjoy mining with my USB Block Erupt er SICS, connected to my computer via a USB hub, but if the difficulty keeps rising, they will not be very useful in a year's time.
I enjoy mining with my USB Block Erupt er SICS, connected to my computer via a USB hub, but if the difficulty keeps rising, they will not be very useful in a year's time.
The A sics will Become Less Profitable with Time
This is not just a problem of delaying the fabulous earnings. Remember that the difficulty of mining increases with time. So the super machine that can get you 1.6 ETC per day now, will produce significantly less in a year's time.
That might seem like an acceptable risk, if you could get your hands on them right now, since they should pay for themselves within a couple of weeks. Unless you are very unlucky and the crypt-currency crashes right after you buy them, you should be OK.
But if you have to part with a large sum of money now, and not start earning for months to come, the risk is obviously much more significant.
Also bitcoin mining cannot go on forever. A limit is set into the system, with the block size being halved every 4 years, so the increase in total currency is limited. In a few year's time there will be far fewer new coins generated than there are now.
The 1 Million Dollar Pizza
In 2010 bitcoins were used by a small number of people, and their value was often negotiated between buyer and seller individually.
One famous case involves the sale of a pizza for 10,000 ETC. At today's exchange rate that is the equivalent to over $1,000,000.
I hope the pizza was worth it!
Will Bitcoins Become a Mainstream Currency, or will They Disappear?
There is always the inherent risk of dealing with bitcoins, whose price is very volatile. Earlier this year it rose to the insane heights of $260, then in April fell to $50. It seems to have stabilized in the last few weeks at around the $100 mark. Since their supply is strictly limited by the algorithm, it is hoped that if they become used by more people their price will rise.
But it is equally possible that it will fall, or they will become completely worthless in a few months time.
Should bitcoins crash, there will be no IMF rescue, and no meetings of G leaders trying to save the currency.
Having said that, there are a lot of investors who are hoarding ETC s counting on their price rising in the future. These people are usually taking much bigger risks than people spending $300-$2500 on an sic. On the other hand, if you want to invest some money in the hope that bitcoins will be worth more in the future, you could just buy coins on an exchange, rather than mining them.
Is it Worth Buying B FL A sics on E bay?
Now there is a way of getting the Jalapeno, and sometimes even the bigger SIC faster. Some people who are on the waiting list already, are selling them on E bay.
Or to be more precise, they are selling their place in the queue. You pay the money now (and obviously you pay more than if you bought it straight from Butterfly Labs, but the seller doesn't actually have the miner in his possession yet. They will ship the item as soon as it is shipped to them by the manufacturer.
It does mean, however, that you will get your (virtual) money printing equipment faster than if you place the order with a manufacturer. At least with the Jalapenos now shipping you should not have to wait too long for your order. Probably.
One of the problems of people getting these very efficient miners, is that the difficulty level is likely to rise quickly once they join the network, since the protocol is set up to produce a new block of 25 coins about every 10 minutes. This will make ETC mining much less efficient.
On the other hand there is the possibility that as mining using simpler devices becomes far less profitable, people without A Sics are going to stop doing it. Presumably most of the people doing it don't use these expensive and hard to get devices.
There are other risks of buying on E bay. Some offers are apparently fraudulent.
One notable E bay auction involved somebody buying an Avalon SIC worth $1500 for over $20,000!
The bitcoin is a concurrency, first suggested by Toshiba Minamoto.
Will this be how we pay for everything in the future?
The bitcoin is a concurrency, first suggested by Toshiba Minamoto. Will this be how we pay for everything in the future?
مشاهده الفيلم كامل بدون روابط بالاسفل
What is Bitcoin Mining?
Lately I've been investigating bitcoin mining as a source of passive income. I've decided that this is very different from trying to make money by publishing online content. To have a chance of earning anything at all, it requires a fairly big initial investment.
Most people are now familiar with bitcoins, even if they've never used them, as the new virtual currency. It is the first currency to be controlled by a cryptography protocol rather than a central bank. Basically you pay for something by sending ETC from a virtual wallet in your computer to the merchant's computer.
So how can you make money from this?. Well, theoretically, your computer can become a node in the network that processes and verifies the transactions. With every block chain that is processed a new block of 25 coins, worth around $2500 at today's prices, is created. This is known as bitcoin mining.
Update Jan. 2014. The mining difficulty has increased 50 x since I wrote this article. Today it stands at 1.4 billion. This means that if my pool found a block once a day in July, it now takes over a month. This makes mining with anything but the most powerful A Sics completely pointless.
On the other hand, the price of ETC has skyrocketed (close to $1000 today), however it doesn't quite make up for the rise in difficulty. According to the profit calculator mining at 5 G H/s will get you $1.5 a day. But check for yourself because it can change dramatically.
If you want to get into crypt currencies, you might want to consider Lite coin rather than Bitcoins. Find out all about it here.
With the right hardware bitcoin mining is pretty much like having a money printing machine, except that it is perfectly legit.
With the right hardware bitcoin mining is pretty much like having a money printing machine, except that it is perfectly legit.
What Do You Need to Start Bitcoin Mining
Technically all you need to become a node in the network, and to start printing your own virtual money is a computer with internet access. You can download a free wallet to your computer, one of several free miner programs, and join in.
Sounds great doesn't it? The problem is that the computer power required is phenomenal. If you work by yourself, with only a personal computer, it might be years before you see your first block. For this reason most miners join a pool, where the work and rewards are shared.
In a pool, when a block is solved and new coins created, you will only get a tiny fraction of a coin. But usually several blocks are solved in a day. The person running the pool takes a small percentage as a fee (say 3%), but you get (almost) instant gratification.
One important aspect of mining is that the difficulty of solving the blocks increases with time.
So can you make money bitcoin mining with a personal computer? It does depend on how good your PC is. Strangely enough the processing needed for ETC mining is much better done by a graphics card (GPU), rather than a CPU. So unless you have a gaming computer with a good dedicated graphics card, well you can do it, but you will mine so little that it will hardly make a difference.
There are two GPU manufacturers that provide the chips for all graphic cards, As Radon and Dravidian. It turns out that Radon cards are much better at bit mining than Dravidian cards. Something to do with the cards' architecture that doesn't really make a difference in rendering graphics in games, but makes a huge difference in mining.
My Dravidian GT 660 Ti video card. Great for gaming, rubbish at mining BIC.
My Dravidian GT 660 Ti video card. Great for gaming, rubbish at mining BIC.
My Experience Mining with an Dravidian GPU
I've decided to try bitcoin mining with my gaming PC, which unfortunately has an Dravidian card (GT X 660th) if you are interested. The efficiency of your setup is expressed in mega hash per second (M h/s). My card appears to work at around 100 M h /s.
I've had some teething problems with the client (I keep being thrown out of the pool) so I have not mined for a full 24 hours, but I've managed to generate 0.002 BIC. That is worth about 20 cents. I suspect that a full 24 hours of mining would yield closer to 30 cents.
Also this is very variable, when mining as a pool, which has a collective power of 3000 Ge/s, we sometimes hit the payload in 10 hours, if we are unlucky, and sometimes in less than an hour. Over time it this evens out.
But remember the increased electricity used by heavily using your graphics card full time. Also the wear and tear on a card probably means it will not last as long as it normally would.
It is possible that mining with my setup will lose me money rather than earn it.
You might be able to do 3-ex better with a Rad eon card. Even better if your PC has two cards running in crossfire mode. But honestly it hardly seems worth the trouble.
Edit: Jan 2014, it is definitely not worthy it now. The difficulty is 5 what it was in the summer!
In the summer this little jalapeno SIC promised to make lots of coins. Today it mines 0.002 ETC per day.
In the summer this little jalapeno ASPIC promised to make lots of coins. Today it mines 0.002 BIC per day.
The New Mining Hardware, Dedicated A Sics
On the other hand, there is the possibility of buying an ASPIC ( application-specific integrated circuit), a piece of electronics, dedicated to bitcoin mining, that you connect to your computer. The smallest of the ones now being produced by Butterfly Labs works at ugh/s (That's 500 times better than my card). They are also developing 50 Ge/s BASICs.
According to a new post from the manufacturer, the miners will draw aw per Ge/s that they hash. For comparison a 42" LCD TV is rated at about 0th. So the ugh/s Jalapeno miner will use 0.6 Kilo watt hours per day, while the 50TH/s big boy will use 3 Kph
If you pay 15 cents for a Kw h, operating the biggest SIC miner will add about $10 to your monthly electricity bill.
The ETC mining profitability calculator estimates that you will earn $17 a day with the 5th/s Jalapeno SIC, and $170 with the 50th/s SIC, after factoring in electricity usage. [Edit Nov. 2013: Now the estimate is $3 for a Jalapeno and $30 for the 50th/s SIC]
They are not cheap, the 50TH/s one comes at $2,500. However, according to the calculator, it would "pay for itself" in 15 days. And then you are basically printing money. The operation requires no more effort than signing in to an exchange once in a while to sell the coins that you've mined.
Edit jam 2014: It is hardly worth mining with my 5th/s Jalapeno now, I reckon I'm making only a bit over a dollar a day (unless the price of ETC goes up even more that is). It is probably as profitable to mine with the 50th/s Butterfly Labs single now, as it was with the Jalapeno in the summer (around $15 a day).
See what the 5 Hash/s Jalapeno looks like
Other SIC Manufacturers
Incidentally Butterfly Labs are not the only SIC manufacturers. In fact the other company "Avalon" managed to produce and sell A Sics earlier this year.
However they only sell batches of the miners, and only to people on the waiting list, so if you want to buy from them now, you will not get your device immediately.
There is also the option of getting the little Block Erupted USB SICS, which do 336 Mg/s. I have 6 of these mining right now, they use little electricity and don't slow down your computer, so are superior to a graphics card.
Asinine Block Erupt er USB 330 MG/s Sapphire Miner
Asinine Block Erupted USB 330 MG/s Sapphire Miner
Buy Now
The Problems with A Sics
Looking at it like this, buying the equipment and becoming a virtual money miner seems like a no-brainier. However, there is a catch, of course there is, otherwise I wouldn't be telling you about this. At the moment you can't just go online and buy these lovely miraculous money making machines.
When Butterfly Labs first got into producing them, they raised the money from per-orders. People paid up to be the first to get the miners, and the money was used to develop and make them. But of course there were hitches and delays along the way.
The bottom line is that the smallest Jalapenos have just started to be shipped to the people who placed orders months ago. Apparently by now (July 2013), they have caught up with orders paid for at the beginning of November last year.
Technically shipment of the bigger miners has started, but they've been shipping the Singles (50 F/s) from the first day of per-orders, 23rd June 2012, the whole months, and with the Little Singles (25th/s) they have only reached 24th June per-orders. I have seen people predicting that orders placed now, will not be fulfilled till next year.
Although one would hope that now that they've started shipping the smaller ones, the path forward will be smoother and they will be able to produce them at a decent rate.
I enjoy mining with my USB Block Erupt er SICS, connected to my computer via a USB hub, but if the difficulty keeps rising, they will not be very useful in a year's time.
I enjoy mining with my USB Block Erupt er SICS, connected to my computer via a USB hub, but if the difficulty keeps rising, they will not be very useful in a year's time.
The A sics will Become Less Profitable with Time
This is not just a problem of delaying the fabulous earnings. Remember that the difficulty of mining increases with time. So the super machine that can get you 1.6 ETC per day now, will produce significantly less in a year's time.
That might seem like an acceptable risk, if you could get your hands on them right now, since they should pay for themselves within a couple of weeks. Unless you are very unlucky and the crypt-currency crashes right after you buy them, you should be OK.
But if you have to part with a large sum of money now, and not start earning for months to come, the risk is obviously much more significant.
Also bitcoin mining cannot go on forever. A limit is set into the system, with the block size being halved every 4 years, so the increase in total currency is limited. In a few year's time there will be far fewer new coins generated than there are now.
The 1 Million Dollar Pizza
In 2010 bitcoins were used by a small number of people, and their value was often negotiated between buyer and seller individually.
One famous case involves the sale of a pizza for 10,000 ETC. At today's exchange rate that is the equivalent to over $1,000,000.
I hope the pizza was worth it!
Will Bitcoins Become a Mainstream Currency, or will They Disappear?
There is always the inherent risk of dealing with bitcoins, whose price is very volatile. Earlier this year it rose to the insane heights of $260, then in April fell to $50. It seems to have stabilized in the last few weeks at around the $100 mark. Since their supply is strictly limited by the algorithm, it is hoped that if they become used by more people their price will rise.
But it is equally possible that it will fall, or they will become completely worthless in a few months time.
Should bitcoins crash, there will be no IMF rescue, and no meetings of G leaders trying to save the currency.
Having said that, there are a lot of investors who are hoarding ETC s counting on their price rising in the future. These people are usually taking much bigger risks than people spending $300-$2500 on an sic. On the other hand, if you want to invest some money in the hope that bitcoins will be worth more in the future, you could just buy coins on an exchange, rather than mining them.
Is it Worth Buying B FL A sics on E bay?
Now there is a way of getting the Jalapeno, and sometimes even the bigger SIC faster. Some people who are on the waiting list already, are selling them on E bay.
Or to be more precise, they are selling their place in the queue. You pay the money now (and obviously you pay more than if you bought it straight from Butterfly Labs, but the seller doesn't actually have the miner in his possession yet. They will ship the item as soon as it is shipped to them by the manufacturer.
It does mean, however, that you will get your (virtual) money printing equipment faster than if you place the order with a manufacturer. At least with the Jalapenos now shipping you should not have to wait too long for your order. Probably.
One of the problems of people getting these very efficient miners, is that the difficulty level is likely to rise quickly once they join the network, since the protocol is set up to produce a new block of 25 coins about every 10 minutes. This will make ETC mining much less efficient.
On the other hand there is the possibility that as mining using simpler devices becomes far less profitable, people without A Sics are going to stop doing it. Presumably most of the people doing it don't use these expensive and hard to get devices.
There are other risks of buying on E bay. Some offers are apparently fraudulent.
One notable E bay auction involved somebody buying an Avalon SIC worth $1500 for over $20,000!
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