TL:DR: Don't bother mining if you want to get rich yo. You're way too late to the party. Welcome to the exciting and often stressful world of bitcoin! You are wondering what looks like a once in a lifetime opportunity to get rich quick. Of course you guys probably heard about this "mining" process but what is this? Simply put, a bitcoin mining machine that performs complicated calculations and when deemed correct by the network, receives a block which contains 25 bitcoins (XBT). This is how bitcoins are generated. So your brain instantly thinks, "Holy shit, how can I get on this gold rush?" Before you proceed further, I would like to explain the concept of mining further. Bitcoin is limited 21m in circulation. It is coded to release a certain number of blocks at a certain time frame, ie: this year the network will release close to 500,000 bitcoins. What this means is that the more people (or specifically the amount of mining power) mine, the less each person gets. The network tries to keep to this time frame through the process of difficulty adjustments which makes the calculations harder and this happens every 2 weeks. So every 2 weeks, you get less bitcoins with the same hash rate (mining power) based on what the difficulty changes are. Recently, the changes have been pretty staggering, jumping 226% in 2 months. You can see the difficulty changes here. Now, why are these changes so large? A bit of a simple history. Bitcoin's algorithm runs on SHA-256. This algorithm can be solved using many hardware, from CPU to GPU and dedicated hardware (Application Specific Integrated Circuits). When bitcoin first started, mining on CPU was a trivial process, you can pretty much earn 50 XBT (the block size then) every few hours between Q1 and Q2 of 2010. In late 2010, due to the difficulty increase that is reducing the effectiveness of CPU mining, people started to harness GPU mining. Only AMD GPU's architecture design are better optimized for bitcoin mining so this is what the community used. Immediate improvements of more than 10x was not uncommon. In time of course, GPUs reached their limit and people started to build dedicated. In the same vein as the CPU to GPU transition, similar performance increase was common. These ASICs can only perform SHA-256 calculation so they can be highly optimized. Their performance mainly depends on the die size of the chips exactly like CPU chips. In general, think of bitcoin mining's technological advancement no different to mining gold. Gold panning (CPUs) vs pickaxes (GPUs) vs machinery (ASICs) and we are still in the ASIC mining race. ASIC mining started with ASICMiner and Avalon being first to the market, both producing 130nm and 110nm chips. The technology are antiquated in comparison to CPUs and GPUs which are now 22nm with 14nm slated for Q1 next year by Intel but they are cheap to manufacture and with performance gains similar to the CPU to GPU transition, they were highly successful and popular for early adopters. At that point in time since there were less competing manufacturers and the low batch runs of their products, miners became really rich due to the slow increase in difficulty. The good days came to an end mid August with an unprecedented 35% increase in difficulty. This is due to existing manufacturers selling more hardware and many other players coming onto the market with better hardware (smaller die). Since die shrinking knowledge and manufacturing process are well known along with a large technological gap (110nm vs 22nm), you get an arms race. Current ASIC makers are closing in on our technological limit and until everyone catches up, the difficulty jumps will be high because it is just too easy to get a performance increase. Most newer products run at 28nm and most chips are not well optimized, so it will be around another 6 to 9 months before we see hit a hard plateau with 22nm or 14nm chips. The estimated time frame is because manufacturing chips at 22nm or 14nm is a more difficult and expensive task. In the meantime most manufacturers will probably settle at 28nm and we will reach a soft plateau in about 3 months. Now, you might ask these questions and should have them answered and if you have not thought about them at all, then you probably should not touch bitcoin until you understand cause you are highly unprepared and probably lose lots of money.
I read that you can mine with a CPU/GPU, should I do so?
No. If you have to ask, please do not touch bitcoin yet. You will spend more on electricity cost than mining any substantial bitcoin. Seriously. At all. A 7990 would produce a pitiful 0.02879 XBT (USD $14 @ $500/XBT exchange rate) for the next 30 days starting 23 Nov 2013 at 35% difficulty increase. And if you think you can mine on your laptop either on a CPU or GPU, you are probably going to melt it before you even get 0.01 XBT.
I get free electricity and I have existing hardware, should I still mine?
Probably not because you probably forgot that GPUs and CPUs produce a ton of heat and noise. You can try but I see no point earning < $20 bucks per month.
Should I buy an ASIC machine?
No, because your machine will probably not mine as much as buying bitcoins. This situation is called the opportunity cost. While you can still make money if XBT rise in value, it is a fallacy.
IE: if you start mining on 1 Dec 2013, a KnC Jupiter running at 450Gh/sec (KnC lies as not all chips run at 550Gh/sec) will yield you a total revenue of 9.5189 XBT with a profit of 0.7859 XBT in profit by 30th Jan 2014 at a constant difficulty increase of 35%. The opportunity cost is: 8.5910 XBT @ USD $580/XBT with USD $5,000 which is the cost of a KnC Jupiter. This is the best you can earn and it's a bloody optimistic assumption because:
You are assuming your pre-order will arrive on time. (I do not think any first batch pre-order from any manufacturer has arrived on time).
All pre-orders are sold out for 1 Dec.
You are assuming your chips will run at 450Gh/sec minimum but many miners here will tell you their chips have been under performing.
Electricity cost have not been taken into account.
Shipping cost and time has not been taking into account.
Import Tax or VAT has not been taken into account.
Risk of downtime due to DOA or warranties has not been taken into account.
You are assuming the difficulty increase will be a constant 35% which is very unlikely because Cointerra with a team that has worked on some of the world’s highest performance CPUs, GPUs and chipsets for NVIDIA, Intel, Samsung, Qualcomm and Nortel has pre-sold an absurd amount of hash rate. Difficulty increase of 45% or more (which we have seen when a small player, KnC shipped their 1st batch) will be repeated commonly. This is only 1 company, imagine what the rest will come out with. I have failed repeatedly and so have many in estimating future hashrate. You wont be able to do better.
Even if you earn some profit, it will be < 15% and will probably be not worth your risk or your trouble. I can buy and hold XBT with no risk of losing them.
The only circumstances where you will earn money is when XBT exchange rates is so high that it makes the opportunity cost pales in comparison. Unfortunately this is not the case. If XBT stabilized at 900/XBT today (20 Nov 2013) then we might have a good case. The risk is just generally not worth it. Unless you have at least a hundred thousand and can make a contract with a manufacturer for a lower cost, do not bother. Just wait until the arms race is over then you can start mining.
I understand I probably won't earn any money, I just want to do this for fun/hobby...
Okay, go buy an AsicMiner USB Block Erupter. They are cheap and pretty fun to have.
I want something with more omph and still do not mind losing money
Sure, just read the answer below on who NOT to go for. You are doing bitcoin a service by securing the network and you have our (the users') gratitude.
Who are the manufacturers?
You can check out the manufacturers and their products below along with a calculator here. If you still insist on buying, do not to go for BFL. Their track record is horrid and borderline scammish. KnC fucked up a lot with defective boards and chips. Personally, I think CoinTerra is the best choice. Alternatively, you can go on the secondary market to buy a delivered product. You can get a better deal there if you know how to do your "return on investment (ROI)" calculation. Personally, I will go for a 45%-50% difficulty increase for the next 3 months for my calculations and a 2% pool fee. However, most products on ebay are sold at a cost much higher than it should. bitcointalk.org is a cheaper place because everyone knows what are the true value is so you will find less options. If you are unclear or need assistance, please post a question.
Which pool should I use?
I actually do not use any of the pools recommended to the left because I think they lack features. My favourite is Bitminter (Variable fees based on features used; max 2%). It has all advanced features for a pool, very responsive and helpful owner on IRC. Variable fees is good for those who do not need a large feature set, even with all features turned on, it is still cheap. Eligius (0% fees) has high value for money but lacks features. It has anonymous mining which might be attractive to certain subset of people but not for others. Many other community member and I disagree highly with the opinions of the owner on the direction of bitcoin. I do use his pool for now but I do so only because I share my miners with a few partners and anonymous mining allows us to monitor the machines without using an account. Bitminter uses only OpenID which is problematic for me. BTC Guild (3% fees) is another big pool and is fully featured and does charge a premium for their fees. That said, they are the most stable of the lot. I do use them but do so only because my hoster uses them for monitoring. I try not to use them because a pool with a very large hash rate (they are the largest) presents a large vulnerability to bitcoin's network if compromised. All of them pay out transaction fees.
Hi /BitcoinMining With LTC mining being reported as less profitable than BTC mining, I changed an older rig (Win 7 x64, cgminer 3.0.1, Catalyst 12.8, 2GB version 6950) over to BTC to see what the differences were. I signed up with the BTC Guild and chose PPLNS because this reward scheme worked well in LTC-land, and in a few minutes the pool was reporting an accurate hashrate for the worker. cgminer is running with only the pool and worker parameters because I haven't read tuning methodologies for BTC mining. The GPU is currently reporting 354 Mh/s, 99.1% shares accepted, but only a work utility of 4.9/m. BTC Guild reports 379.04 Mh/s and 99.07% shares accepted. The allchains calculator estimates 0.016 BTC/day for 354 Mh/s but the rewards from BTC Guild are only averaging 0.011 BTC/day. Given that BTC Guild is reporting a higher hashrate, this lower reward is unexpected. My initial questions are: (1) Is there a recommended tuning guide for BTC mining? This GPU was performing really well with LTC mining and I'd like to make it more efficient for BTC. (2) What would be causing, or contributing to, the significantly lower reward from BTC Guild? Cheers.
7Th/s KNCMiner Jupiter and Bitfury Bitcoin Miners 7000Gh/s KNC Not Cointerra for sale best offer in BTC gets it.
Listing a package of mining gear that averages about 7Th/s at the pool, in this case BTC Guild. Hash rate will vary between about 6800-7050 but could move by as much as 10% like most miners. I cherry picked a number of units from my collection of primarily KNC gear to focus on high performing systems that provide a great hash rate with reasonable Since some potential buyers have asked I pulled up a Bitcoin calculator for 7Th/s with BTC = $560 USD. Obviously with the variable exchange rate, and difficulty increases estimated it's a possible look but not for sure. This Difficulty Coins Dollars per Day 0.70310438 BTC $393.74 per Week 4.92173067 BTC $2,756.17 per Month 21.37437318 BTC $11,969.65 this diff (est) 4.59761908 BTC $2,574.67 Next Difficulty [estimated] Coins Dollars per Day 0.61923263 BTC $346.77 per Week 4.33462844 BTC $2,427.39 per Month 18.82467208 BTC $10,541.82 All KNCMiner systems running 1.0 firmware with custom clock and voltage settings, clock settings I use not allowed in the stock firmware but all running solid and tested for weeks now. All units have custom fans installed to help maintain ASIC and VRM temperatures. To maintain the listed hash rates units will need to be run with covers off, ambient temperature where I run all KNC units in my crowded basement is about 78F. 6 x KNCMiner November Jupiter with EVGA 1000W Power Supply - 5500Gh/s 1 x KNCMiner October Jupiter 6 module with Lepa 1600W Power Supply - 1025Gh/s 1 x Bitfury 16 Card System with Raspberry Pi 32GB SD and custom Case, Thermaltake Power Supply - 500Gh/s Pics available upon request. Send me an offer want to sell today.
New to bitcoins. Can anyone give me a rundown of this?
As the title says, I'm new to Bitcoins. I started mining a few days ago for fun, I have a Radeon 5970 that I use for gaming so I thought...well, why not? Also, got started with BitMinter since it was so easy, but I'm open to other mining pools. Anyways, on to the questions:
Why has the price been soaring the last few days? Is it because the ASIC machines just hit the market?
With the new ASICs out, is it even worth GPU mining anymore? I get about 600 MH/s, and given current prices I can make a decent amount of USD (not saying I would, but it's an idea.) If I had some disposable income to buy an ASIC machine, would that even be a good idea at this juncture? It seems with the bubble this will be a new fad.
Speaking of exchange rate, what kind of things can you buy with BitCoins? I'm not a big TOR or drug user, so SR is out of the question. Aside from that, in all my searches most of the services seem to be..quirky at best. Design services, web hosting, and T-shirts. Is there anything else to buy?
What are some decent mining pools? I've read a bit, and it looks like BitMinter is pretty good. MtRed has been down so I haven't tried that. BTC Guild seems HUGE, is there an advantage to being in such a large pool like that?
What are these hashes actually USED for? When I think of other at-home calculation software, like folding at home, or SETI, they all have distinct purposes. What's actually being solved when I solve a block?
I want to invest in BitCoins. The stock market has always fascinated me, and it seems like BitCoins could be a very similar venture. I've also thought about investing in a BitMining company; might not make as much money as a getting a 1500GH/s machine, but it'd still be a worthwhile investment I think. Good idea? Bad?
How likely is a crash? It seems the price has gone up by about 100x in a month. What are the ramifications of this? Is there going to a bubble-burst model in the foreseeable future?
What's the end-game for BitCoins? Is it supposed to completely take over the dollar? Be a supplement to it?
How likely is it that the US government will get involved in this? I know it'd be very hard to take BitCoin down, but given the level of traffic it's getting it almost seems likely.
Last but not least: How does one actually buy and sell Bitcoins for USD? I've looked into the big bit exchanges, like MtGox, and apparently all you really need is some BitCoins and Dwolla. Is it really that easy? How long does a transfer to and from Dwolla and MtGox usually take?
Thanks in advance. I think I had more questions, but this should be enough for now.
How long until bitcoins aren't accessable to the average user?
This is a general discussion on the bitcoin market itself, but also has to do with mining. If a mod determines that it needs to be moved to a different sub-reddit such as the mining reddit, please notify me and I will do so. I'm not much of a genius when it comes to bitcoins, but I do know about the market and a good bit about how people think, since I'm a human myself. When I first looked into bitcoins, people still made profit CPU mining. This is possible today, but anyone in bitcoinmining can tell you that it probably isn't worth your power bill, or even the internet bandwidth you used to download the miner. Then there was a paradigm shift where everyone started buying GPUs to mine off of, which is what most people have been doing recently, as far as I know. With some of the newest tech, you can get hundreds of Mhash on consumer level (ok, maybe a bit higher) GPUs. But that's not enough. With new development in ASIC cards, mining is a lot faster. In BTC Guild, the ASICMiner account reaches over 7kGhash, which calculates to around 400BTC per day (not necessarily as profit, however). Anyways, back to non-mining spec talk. Because of these new cards being released, they will become the new standard for mining, the way that GPU overthrew CPU. This is natural, but could case obvious problems. As consumer level CPUs become obsolete in the mining world, and GPUs aren't seen as the standard because of development in ASIC technology, and with Moore's law providing the basis for cards like ASIC miners improving over time, will regular people lose interest in bitcoin? I've been seeing many threads in bitcoinmining titled "Just bought a new gaming computer, can I use it to mine?" followed by specs that aren't too shabby; multiple GPUs, 4.0GHz+ processors, very nice (yet expensive) computers. Your average Joe wouldn't buy this, and it's not even seen as very good for mining. This is just the start. When an ASIC is seen as "required" to start mining, people with high end PCs won't even try. Therefore, the only way that the average computer user will acquire bitcoins is through buying them, which brings up the issue of discovery. Sure, more and more businesses are accepting bitcoins every day. But will the acceptance of bitcoins by smaller stores move people to try it out? If someone is going to buy a product on Amazon, for example, and they have a credit card linked up with their account, how will a "Pay with Bitcoin" link motivate them to invest in what the media usually portrays as a "made up currency"? My overall thesis is that it seems as if the direction bitcoin is going in will cut off the entry of average users and restrict it to computer aficionados. This will have obvious effects on the market, which you can speculate on your own. But tell me, reddit, what are your thoughts on the issue? How can we reform this economy to be suited to entering, average users when currently it's aimed at people with very strong PCs? Do you think it should stay this way? Do you have an innovative way to prevent this new paradigm from occurring and reducing new potential bitcoin circulators? I'm open to all thoughts and conversation, for this topic really intrigues me. Who knows, tomorrow an ASIC for residential use could be released and soccer moms would mine their own currency.
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