MANIC MINERS: Ten Bitcoin generating machines Bitcoins are either the new bubble economy or the future of online commerce. It’s not the first time anonymous e-money has been tried – ask Mondex – but Bitcoin does seem to have traction. There are things you might want that you can buy with it, such as Tesla cars and Virgin Galactic trips to space. Zynga has announced that …
well i agree, unlike most above,but their points are valid , everything uses some energy , specially paper money.
but the thing that gets me about bitcoin is the intensive processing just for the sake of it - just so that everyone dosent do it - its just a test.
All other processing and real world stuff discussed above is doing it the easy way. Bitcoin hash cracking is just making it deliberately hard to control pace.
It's not a complete waste even though it might seem it.
Because the electricity cost is so intrinsic to how profitable a bitcoin mining rig is in the future this industry might be the source of great advances in efficiency which could benefit computing as a whole.
There is some incentive for traditional chip makers (CPU/GPU) in the pursuit of high clock speeds and in the mobile market there is equally some incentive to save battery power but it's not as acute as with bitcoin mining.
> does the whole mining process not strike anyone else as being an utterly futile waste of electricity and processing power?
Yeah, I know how you feel.
However, the same can be said for the physical mining or gold, or diamonds... at least Bitcoin mining doesn't pollute groundwater or result in hundreds miners being killed each year.
One can almost imagine a swarm of self-replicating machines in orbit, feeding upon satellites for raw materials and turning sunlight into virtual gold... maybe its that sort of disastrous situation that which caused the universe of Star Trek to be a 'post money' society!
We do a lot of nasty mining to get the materials for computers and power generation.
Lots of things are pushing us to find efficiency.
Are there estimates of the volume of network traffic from Bitcoin (and its copycats)?
How much electric power does all that mining take?
Says you, using an electricity-consuming computer to post it.
Let's seem some stats - how does the power required for the Bitcoin network compare to other things, such as power to run banks and so on? Or indeed, what about the energy required to mine gold?
Claiming that any use of electricity is absurd, as you could use that argument against just about anything. This is like the "Let's save the planet by turning off lights for one hour" argument from people who then continue to use electricty the rest of the time.
And how much power does it take to generate £1 of real money in your pocket? I'm not talking about just the minting/printing but the going to work, doing your job, everyone else doing jobs so you can do your job, government structures to manage the pound you finally get etc etc etc. Compared to all that I expect the power used by a bit mining card is sweet fuck all.
I see your point - but I'd be hugely delighted not to work if society made that feasible, so the argument is flawed.
All I'm saying is that it seems rather unnecessary to design the infrastructure behind a currency to be so intrinsically labour intensive that all of this number crunching is required just to help set it's value, the quantity in circulation and to manage simple transactions. Yes of course I'm aware that any currency has all kinds of overheads around it's creation, maintenance and things like FX rate discovery, that's what traditional markets do - as it happens I work in finance myself writing systems that do EXACTLY that so you'd think I'd welcome it!
The whole thing seems rather over-engineered.
@AC 14:22 and all
I'm just wondering: is there really no way of re-purposing all this hardware? Sort of switch them over to looking for Galaxies, Protein mapping or something useful once the Bitcoin rarity threshold becomes silly?
"I'm just wondering: is there really no way of re-purposing all this hardware? Sort of switch them over to looking for Galaxies, Protein mapping or something useful once the Bitcoin rarity threshold becomes silly?"
Even better if it had been used for something like folding@home in the first place - ie something genuinely useful for humanity , rather than just a silly vanity exercise that in the future probably won't even break even in cost unless electricity is free.
I'm just wondering: is there really no way of re-purposing all this hardware? Sort of switch them over to looking for Galaxies, Protein mapping or something useful once the Bitcoin rarity threshold becomes silly?
Google can easily provide the answer to that question for you, but to save the wear on your fingers - it's "no".
The specialised chips used for mining are single-purpose ASICS. The only thing they can do is generate double SHA-256 hashes (i.e. a hash of a hash) and check if the leading digits are zeroes. They are not even any use for cryptography, since nothing else (except other similiar cryptocurrencies) uses double SHA-256 hashes, and even if it did, the application of finding a certain number of leading zeroes in the result is decidedly limited. The advantage is that these chips use considerably less power than a general purpose processor doing the same job and do it in much less time.
Obviously the value of Bitcoins can't go on rising at the current rate ( I think they are probably in bubble at the moment), however the difficulty of hashing can. There will at some point be an equilibrium where the cost of mining is just covered by the value of the Bitcoins produced. I don't think this is far away if it has not already happened. At that point the Bitcoin experiment reaches level 2: a steady state. Anything could happen and it will be interesting to watch, from the sidelines.
Not to mention, all these mining gear shops are selling you their previous generation hardware, while saying they're working as fast as they can on the current generation to be able to sell that to you. But in truth, they're using the current generation hardware for their own mining, until they complete building the next newer generation of hardware for themselves upon which they'll happily sell you the generation they've already stopped using.
Given the logarithmic curve of increasing difficulty in mining additional Bitcoins, that makes perfect sense for them, and the hardware sales are just icing on the real cake.
Waiting for the next market-manipulation-induced dip by the international banking cartel might net you more coins than the always-obsolete(TM) mining hardware you can buy.
I wonder if companies like these use or are building ways to automatically utilise un-used PCs for BC mining? They have the hardware available for free other than power usage and wear'n'tear, on a massive scale.
In fact if they did this, couldn't they make mining BCs commercially non-viable for everyone else as the difficulty increases with product rate (IIRC)?
"... other than power usage and ..."
That's the problem with using something like EC2/AZure/Cloud etc.. These services aren't optimised for this type of work. The power consumption (and therefore the cost) of a server vastly outweighs what you could achieve with a dedicated ASIC board. Also, the actual computation for the hash is simply a couple of SHA-256's which can be burnt directly on to silicon rather than through code. As such, by current standards your ROI will be negated simply by the cost of the electricity. Of course, if you're using someone else's electricity (i.e a bitcoin botnet), then you don't pay for it. But even this is inefficient because if you're not pumping out hashes in the Giga/Terra rate then you'll simply lose each round (you have about 10 minutes per iteration to find a hash that is lower than the current difficulty).
"Customers who paid in Bitcoin were promised on the Bitcointalk forum that if Hashfast had to issue refunds, it would do so in Bitcoin. However, as the contract said refunds would be in dollars, it is now only offering that currency. Since $2,000 worth of Bitcoins in October would be worth $10,000 now, this has unsurprisingly ignited the ire of those who pre-ordered".
...and therein lies the problem for anybody using BTC for any purposes other than speculation.
Yes. In fact, everything about BC smells like a scam. Perhaps that is why China has banned BC currency exchange. When the US and EU follow the Chinese it will be game over. Think about it. Why would these economic powers allow an upstart to undermine their own currencies? Why would they make life easy for the money laundering criminals? Not to mention, if these economic powers were afraid of a BC takeover of the money system, wouldn't they be bringing their many supercomputers into the fray and essentially monopolize the mining? Well, I suppose they would have to share it with the other powers, but it would certainly take the little guy out of the picture altogether.
Which brings up another point. Those professors who started this had an easy time mining in the beginning, yes? Then sold the suckers the get rich quick scheme. The suckers then drove up the price while they sat back and got rich from their easy mining early on. The first in make all the money. The last in lose. Those few on top of the pyramid.....oh, wait! We have seen this scam before, haven't we?
Those professors who started this had an easy time mining in the beginning, yes? Then sold the suckers the get rich quick scheme.
That is why I am always a bit nervous about offers that purport to allow their customers to make money for themselves, especially when they promise you'll be able to "work from home". The question I always ask is, "if this stuff is so good, why are they even selling it? Why don't they keep it all to themselves and reap all the rewards?"
There's a big difference : that plot is real. The government cannot declare that it doesn't exist anymore.
BitCoin is another Internet fad, one that, as had been said, profits the most to those who started the pyramid.
Everything in this article tells me to stay away from BitCoins. From the fact that the hardware is dedicated, to the fact that the vendors themselves can be thieving scum, and finally the fact that BitCoin mining is becoming so exponentially difficult that soon only industrial plants will be able to mine them. Oh, and copycats are rising, mudding the waters further. What ? Does everyone think that a dozen virtual currencies are a Good Thing (tm) ? It's just a dozen more pyramid schemes which won't actually bring anything useful.
The only way I'm going to see a BitCoin is if someone gives it to me, and the only way that will happen is if I accept one in payment for something. Given that, at this point in time, I have no use for BitCoin nor anywhere to spend it, I won't be accepting one for a while yet I think.
The only way I'm going to see a BitCoin is if someone gives it to me, and the only way that will happen is if I accept one in payment for something. Given that, at this point in time, I have no use for BitCoin nor anywhere to spend it, I won't be accepting one for a while yet I think.
Compare this to other fiat currencies, such as the dollar, or pound, which contrary to popular belief are backed up not with gold, but only the promises of government. The Bank of England practises 'quantitative easing' - essentially printing more money, so that what is in your pocket is worth less. Paper currency also suffers from the problem of forgery, which, unless there is a flaw nobody has seen in BitCoin, is not possible with such a cryptographically generated currency. The paper money in your wallet is, after all, just a token of a given value, and a bitcoin is the same, but in digital form. The authenticity of that bitcoin is guaranteed by the network itself; I'd be more inclined to trust the maths behind that than any politician.
What remains to be seen is how much traction bitcoin gains. You can already buy several goods and services using them - the advantage being that since the transactions are between two addresses, governments cannot tax them directly, any transaction fee actually goes to the person mining the next block of coins, which will be what keeps the mining going once all the coins have been generated several years from now.
I have this feeling that the safest way to make money out of bitcoins is to sell mining gear. Bit like selling mining gear during the gold rush of 1849. Sure, some miners struck it rich, but the people selling gear were profiting from all mining attempts, successful ones and flops alike.
The safest way to make money is put it in a bank account - and enjoy your 2% interest if you're lucky. But when comparing investments, there are a range in both risk, and potential returns.
Also why is it either/or - I'm sure anyone into making Bitcoin mining devices bought or mined some bitcoins much earlier... They also probably test their machines by actually mining bitcoin (where as someone making a spade wouldn't necessarily go and dig for gold, as you need more equipment and effort than just testing a spade).
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It is now simply too late for @ home mining. 12 months ago you would have had a good opportunity to get in early before the arms race took hold. If you're buying hardware now, it's highly unlikely to yield the return you dream of. You might want to consider alternative routes like renting a miner for a week or simply buying bitcoins directly as a speculative investment but doing it yourself is now over.
That's certainly true for BTC, which is where the alternative Crypt based cryptocurrencies such as Litecoin and more recently Doge have come from - because scrypt doesn't currently benefit from the ASIC hardware out there (although naturally there are people working on Scrypt ASICs).
Will Litecoin and the other alt-coins enjoy the same success when its no longer possible to mine them with old graphics cards that were formerly used to mine bitcoins?
most people mining litecoins seem to be doing so, just to trade them for bitcoins.
and as you say, theres nothing inherent in the scrypt algo that can't be accelerated. there's just not been enough commercial justification to do it until now. and theres several asics on the way. will any of these alt-coins survive after the asic mining transition?
Actually about mid 2012 was the cut-off date when you could have bought off the shelf a (then) brand new top-of-the-line Altera Stratix V for about $6k dollars and at ~2GH/s would have had a month or two to cash in. Clearly there were a lot of folk with their finger on the pulse back then who did exactly that.
Since then you have had to buy ASIC boxes which transform into boat anchors the instant the next process shrink happens.
Scrypt is quite a good leveller as your hash rate is more-or-less tied to your randomly-addressed memory bandwidth. Static RAM devices, particularly those with multi-ports gain you a bit of an advantage over PC DIMMs. Fortunately modern FPGAs are chock full of small SRAMs and an ASIC similarly dense cannot be made low-cost due to die area requirement.
The LRAC of ownership including electricity, maintenance and administration of the park might outweigh the harvest. Even if not, as another poster already wrote, supplying the gear is the more reliable and stable market. And a business has to think a few years ahead, usually, depending on how the initial costs were being paid for (eg investors).
It seems that it is more profitable for them to plug them in and use them themselves, but only for a period of time. After that period, they start to be too slow to be profitable, so then they're sitting there with piles of stock that's making them no money and for which there is no demand.
That means they need to sell stock on while it's still considered fast enough that other people can see profit in buying it for mining. The people making them must find the right time where they can give up any future profits from mining and balance that by selling the device.
Anyone buying from them must therefore automatically be looking at a thinner profit margin than the people making them, but then I guess that's just how life works.
At least when everyone was doing this with graphics cards, there was still some inherent value in the kit once it was no longer profitable to mine with it. Well, I hope so anyway. I wouldn't mind picking up a bargain graphics card just for gaming.
Question: Is there any use at all for these ASICs once they're retire from mining?
@Ac
Curiously, I was reading a similar roundup of BC-mining hardware, and it was noted that one supplier had started as a speculator and was now offering hardware, whilst another hardware supplier had since become a speculator.
It seems the two companies have converged upon the same hybrid business model... part gholdminer, part seller of shovels.
>>>If the idea is that punters buy these machines to mine bitcoins and make a profit, why is it not more profitable for the companies that make them to simply plug them in and get them mining for themselves rather than to sell them ?
Many if not all do just that. Here's how the game works.
Day 1 Open a preorder opportunity for your new magic miner
Day 2 Be flooded with millions from greedy miners
Day 3 Use your new preorder cash for research/costs to get your product designed and made
Day 100 Ship 50% of your finished product to your "investors".
Day 85 Start mining for yourself with 50% of your finished product that was paid for by your "investors".
Day 115 Hand the lawyers the keys to the office and retire to the tropics.
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