Its not cold in the summer, and it probably too cold in winter to not have any interior climate control. With much lower cost of living and cheap electricity, China seems like a much better option, the majority of mining is actually done there.
Mais, in the winter, the waste heat is free heat. Basically, if you deduct the money that you would have spent on heat, the electricity is very cheap.
Another way to think of it: The heat from a bitcoin rig is the same that you would get if you used an electric space heater or an electric baseboard heater. These cost about 2-3x as much to run as a gas or oil furnace. So, if you're able to turn off your heat and just heat with a bitcoin rig, your "cost" is less because you're not spending money on something else.
Mais, in the winter, the waste heat is free heat. Basically, if you deduct the money that you would have spent on heat, the electricity is very cheap.
Another way to think of it: The heat from a bitcoin rig is the same that you would get if you used an electric space heater or an electric baseboard heater. These cost about 2-3x as much to run as a gas or oil furnace. So, if you're able to turn off your heat and just heat with a bitcoin rig, your "cost" is less because you're not spending money on something else.
I have heard from a trusted source that people in Russia are buying graphics cards by the truckload and building mining farms, and getting free electricity by bribing utilities / government officials. So keep in mind that you are likely competing with Chinese and Russian miners who don't have the same costs.
Yes, but the volatility of Bitcoin could make it not profitable again. Instead of buying a miner what if he took that money and bought bitcoin at that point of time. Wouldn't he have more money?
The premise of mining bitcoin is not really about being cost effective today, but taking a long position on its value, and what you perceive the value will be, for totally anonymous money at some point in the future. Because the profit earned from mining is pretty close to the definition of untrackable in a crypto.
You need to buy the equipment from some third party and hide your IP address. It's possible to do both while maintaining anonymity, but if you can hide cash transactions then bitcoin get's you zero net benefit while exposing you to new risks.
I think it depends on whether you think the price will go up, or merely remain high. Mining lets you make money even if the price remains stable, as long as it's already sufficiently high. To make money with buy and hold, the price needs to increase.
Because it's super easy to buy and hold Bitcoin, if it becomes more popular the value of mining rigs will increase. Right now, there's probably no material difference between buying the coin itself or buying the rig and mining, but eventually, it may become more pronounced.
There are other benefits as well. Buying the mining rig is a sort of hedge in that if bitcoin drops to $0, you at least have some hardware that can be re-purposed/sold.
The more people who mine the less valuable your mining hardware becomes, as the hash rate increase will lead to a difficulty update: it is a lottery that is designed to give payouts at evenly spaced time intervals.
You also now have a slightly old, very special purpose computer... it is like owning a three year old graphics card in a world where you decided graphics cards are not that interesting to own... what exactly are you "repurposing" it for? If it is some really awesome ASIC-based mining rig it might only be useful to mine Bitcoin.
But the more popular the coin becomes the harder it becomes to mine it. If the increase in mining difficulty (driven by total network hashrate) increases faster than the price of bitcoin then your mining apparatus becomes less and less profitable.
As for repurposing hardware, that might work with GPUs (although their value depreciates pretty quickly) but the Antminer is a custom ASIC, so it can't do a lot more than bruteforce SHA-256.
>Solis bought a Bitmain Antminer S9 on eBay for $2,400.
>As of this weekend, Solis has mined 1.01 BTC, worth a little more than $2,584 in his bitcoin wallet.
>Solis said:
>"When I bought the miner, the price per bitcoin was around $1,200. I thought I’d break even in one year, but actually it’s been about five months."
So he would have been much better off just spending that 1,200 on Bitcoin rather than on a mining rig.
According to its Amazon listing, the Antminer S9 consumes 1247 watts at the wall. Assuming he ran it 24/7, over a year he would consume about 11,000 kWh, or about $1,300 at the average U.S. electricity price of $0.12/kWh. Without knowing how much he was paying for power of course we can't know exactly how much he spent, but this certainly doesn't seem like a slam-dunk win, compared to just buying Bitcoins outright.
And indeed, it couldn't possibly. The EMH almost guarantees that hobby mining can't be profitable once the coin is popular enough.
11MWh average, 0.12 cents/kWh?! Power costs more than twice as much in Europe, and the average household uses half as much. No wonder you guys (in a twisted democratic sense of the word) aren't too fond of climate treaties.
I know you're sort of joking, but that doesn't really explain it: the places where power is cheapest in the U.S. are the places where the most renewables are used. Here in Pacific Northwest power is closer to 8 cents/kWh because it's mostly hydro; Texas is cheaper than in the surrounding South because it has more wind power, etc.
Is anyone tracking the electric costs for mining? I would love to see the stats on that. What about using something like solar to power this? Then you would have your upfront costs for the solar panels, but not have recurring electric costs?
The biggest mining operations are Chinese and Russian farms getting their power through questionably legal arrangements, so those statistics probably don't exist and wouldn't have much relevance if they did.
You can't bribe your way into 30 megawatts of power.
The biggest mining operations have legal partnerships with local and national governments.[1] As well, Russia isn't a major place for bitcoin mining: instead, mining is mostly concentrated in Georgia (the country, not the state) and China.
Mostly they're concentrated around cheap hydroelectricity, with major mines in Labrador (2c/kwh), Central China (varies, but <4c/kwh), and Georgia (unknown, bitfury likely has a special deal with the local government). A few exceptions are Northern China (coal grid @ ~3c/kwh) and Iceland (geothermal @ maybe 5c/kwh, this isn't too clear either).
Solar panels are not effective for bitcoin mining, because hardware needs to run 24/7 (a shitload of batteries are needed) and the upfront cost is high.
It doesn't need to but given that the difficulty is ever increasing if you only mine, say, 1/3rd of the time you're at a disadvantage compared to 24/7 miners.
Now if the price of solar electricity is completely free and bitcoin doesn't crash then mathematically there'll come a point when you'll break even but it might take a long while as the mining rewards keep dwindling as difficulty increases while you spend most of your time not mining. Eventually your miner hardware or solar panels will need maintenance and that will increase your costs.
You'd have to do the math to see how long it'll take you to break even, but something tells me that it won't be nearly as competitive as those server farms using cheap hydroelectricity.
It is very cost effective by those who don't pay for electricity directly. Plenty of older condo and apartment complexes do not meter individual customers. The electricity costs are a component of the condo fees. University housing is an example.
The source of the power is irrelevant: you could be selling that electricity to the grid, or offsetting the cost of your home's usage. Buying a solar panel may eliminate the middle man, but there's still lost opportunity cost.
The source of power may be irrelevant to you, but not to me. Where I live net metering is capped at 30% of my utility costs. So if I produce more than 30% of what I use the utility company sucks up the excess that I produce and keeps it for free.
This is hindsight. He would have been best off staying the fuck away. As I mentioned a billion times cryptocurrencies (which are not currencies either) have zero legal real world use cases, currently the two uses are illegal money transfers out of China and hype. It's the worst sort of gambling: you do not even know the odds.
> Every time I ask, people come and say but... but... international transfers! and I point it out that for that transfer the sender needs to buy bitcoins, transfer and the receiver needs to sell them because there is no legal, useful application of it :) And this is untenable, you can't have the receiver go through hoops to receive money. And when I compare this to how Transferwise combines a fantastic user experience with favorable rates (which I actually compared to an FX company not to a bank) then I am a Transferwise shill despite it's usually not me who brings up the transfer argument so I now I did just so we don't need to have that conversation again and again.
Don't do what? Someone needs to advocate against this bullshit.
People are cheering this crap because they hold coins and when ordinary people get burned they shrug and say "you shouldn't have done that". Ordinary banking systems have a number of brakes built in so that people do not lose their money in an instant -- at least not that easily.
As an example, more than one person made the mistake of typing in an Ethereum address instead of copy-pasting and losing their money in the process. Or when someone's account on an exchange get hacked and thieves walk away with the money the usual answers are "why you didnt have 2fa" or "why did you leave money in the exchange". If someone hacks my online account they can't do an outgoing transfer to a new address without verifying a code first -- that's 2FA -- and more likely than not, there'll be a daily/per transfer limit I can report to the police, contest the wire and so forth. There are remedies. If it's crypto"currency"? Sorry for your loss!
When I say, legit uses, and people say, VPN, I am like sure you want to do a public service of seeding Linux images and your evil ISP stops torrenting so you need to use a VPN. I get it. The fact that you are using an anonymous way to pay has absolutely nothing to do with the fact that the traffic you run through this VPN is breaking the law. Surely No True Scotsman or in this case No True Hacker News Reader would do such a thing!
When I say, legit uses, and people say, various businesses accept Bitcoin, no, they absolutely don't, they integrate the separate sell your bitcoin step into the checkout, the moment Bitpay dropped Canadian dollars, Newegg Canada dropped Bitcoin without a second's hesitation. No business wants Bitcoin on their books, that's a horror bookkeeping / accounting wise.
I maintain: all there is illegal money transfer out of China and more than a little hype with the occassional Ponzi and other scams thrown in. Just because sometimes VCs are on top of a pyramid scheme it doesn't cease to be a pyramid.
Neither does a beautiful hand-crafted glass bong, but there are many people willing to spend thousands of dollars on them and those dollars a perfectly legally useful.
The major problem with buying mining rigs is that they may be pre-mined. Often the developers will use the rigs for mining and then when the rigs stop becoming profitable (assuming the bitcoin price is stable), sell them as 'new'.
This analogy makes it sound like there were a certain number of Bitcoins inside the computer and they are all already discovered... why does it matter if a computer is used or not: all that should matter is how fast it is (and that would be difficult to lie about as you would notice immediately upon receiving it if it wasn't as fast a second claimed), and the buyer should know how fast of a computer they are willing to buy at a given price.
This doesn't make any sense at all as a major problem. Used vs. new is basically irrelevant as long as no one is lying about the hashrate. As long as the sale is immediate there's basically no problem at all there.
The actual problem, especially in the past, was that you could pay for the hardware but not actually obtain it for months, by which point it was no longer profitable. Presumably, the manufacturers were using the hardware themselves during that period.
It was certainly a major problem, if you bought a new car but the dealer gave you one with 50k miles on it would you shrug it off if the gas mileage was still the same? At a basic level it's fraud.
There are practical concerns as well, these machines are usually pretty poor quality and the immense heat + poor cooling typically means the chips will burn out one-by-one over time. The PSUs are especially poor and will burn out and need replacing as well. Getting a used ASIC means these will be problems sooner.
I think this article is mistaken. People are mining Ethereum causing GPU prices to spike 2-3x. Eth is designed to use a lot of memory so GPU mining is always viable.
Using a lot of memory complicates any ASIC design but it doesn't eliminate the possibility of such a thing being made.
If someone really knows their hardware engineering they could interface with GDDR5 memory on a custom board and mine as fast or faster than a GPU.
It's just a matter of how much money it will take to develop such a chip. I'd guess at least $2-5 million given how you'd need to fabricate it at 14nm or better to get sufficient performance, and that process can be a serious headache for smaller firms.
Thinking about it, I wonder how much QDR SRAM bandwidth compare with GDDR5. This would be useful for Monero for example. Nobody is going to care about spending a few hundred for FPGAs with large amount of memory if a 5x-10x boost over GPUs is possible, but...
There's a price trap here. The good FPGAs still cost $10K or more each and if you're intending to ship that hardware, which is how the Bitcoin and Litecoin ASIC platforms bootstrapped themselves, you're going to be in trouble if your FPGA solution can't beat the equivalent spend on GPUs. Bitcoin lends itself to FPGA acceleration extremely well, SHA256 is trivial to implement in an absurdly parallel way. Scrypt is a bit more messy but not impossibly hard. The Ethereum one is a beast by design, so it'll be a true challenge for any implementor.
Ten R580 cards can really crank out hashes for Ethereum. For a GPU to keep up it's going to have serious memory bandwidth issues as that's one of the limiting factors in this brand of mining.
What you might see is someone getting a license to make "OEM video cards" and then produce a line of mining-optimized cards. Given the constrained supply across the board on any AMD GPU this would be an easy win for a company like MSI or Gigabyte that's already making GPUs. Strip off the useless ports, tune the memory bandwidth, and make them work over USB-C instead of PCI-e so you can really pack a system full of these things.
Making an external GPU that comes in a nice housing with USB-C interconnect would also sell well in the machine learning market where you wouldn't have to worry so much about shoe-horning GPUs in your case. You could just stuff them in a rack.
I am thinking of Monero and CryptoNight not Ethereum for FPGAs for that reason. I am thinking of ideally something like Virtex-7 or Vertex-8 with 32Mbit or more of memory.
There is also a minor advantage mining ETH in that your hardware is kinda resellable afterwards. The motherboards maybe not, but the power supplies will be. Sooner or later when PoS comes in, GPU mining ETH is going to stop.
There's an argument that the cards will flood the market and won't have any resale value, though I'm not sure (plenty of people want the cards for gaming). In any case that's mainly applicable to AMD cards.
However, the reason I bought NVIDIA is at least I have 4x 1060's as a nice little CUDA box afterwards.
For those thinking, "now's a great time to join the party!", the price surge happened from about March to about May of this year, with BTC more than doubling in USD price. However, it's been completely flat for over a month now -- longer than any other point in recent history -- and there are currently some big questions about the future of BTC that are being addressed next month and may result in a loss of value for some number of people, depending on how things shake out.
Smart money right now isn't in BTC, unless you think you can predict what's going to happen in the next six months and you're willing to keep it for a longer period. And, even then, you'd be better off selling it back to USD and re-buying when it likely falls back down to sub-$2000 in a month.
I am not a financial expert. Some people have maxed their plastic out on bitcoin. I think that someone somewhere sometime will be left with the bill if there is no actual resource behind the currency - it is just an IOU after all. The UK PM talks about terrorists having no place to hide their money today, it dives $200. Too much feels like an elaborate scam - a silkroad clone goes completely dark or exchanges 'getting hacked'. I know I know: if I'd kept my .bitcoin I'd be even richer now...
I sure hope anyone who's mining Bitcoin isn't also complaining about climate change. Also, electricity costs and various other externalities (depreciation of the machine and inevitable waste handling) are never accounted for.
What is fun is the Litecoin one, and the fact there are ASICs with crappy power efficiency like the GAWMiners Fury and any other miners using the Zeusminers chips.
95 comments
[ 3.4 ms ] story [ 162 ms ] threadTrust me, these miners put off enough heat that it's not an issue.
Another way to think of it: The heat from a bitcoin rig is the same that you would get if you used an electric space heater or an electric baseboard heater. These cost about 2-3x as much to run as a gas or oil furnace. So, if you're able to turn off your heat and just heat with a bitcoin rig, your "cost" is less because you're not spending money on something else.
Another way to think of it: The heat from a bitcoin rig is the same that you would get if you used an electric space heater or an electric baseboard heater. These cost about 2-3x as much to run as a gas or oil furnace. So, if you're able to turn off your heat and just heat with a bitcoin rig, your "cost" is less because you're not spending money on something else.
That's not free...
X/Infinity = ~0
No. You don't.
The other stuff is just confusing.
mining adds slightly to the decentralized nature but I am curious about comparing buy and hold vs mine.
There are other benefits as well. Buying the mining rig is a sort of hedge in that if bitcoin drops to $0, you at least have some hardware that can be re-purposed/sold.
You also now have a slightly old, very special purpose computer... it is like owning a three year old graphics card in a world where you decided graphics cards are not that interesting to own... what exactly are you "repurposing" it for? If it is some really awesome ASIC-based mining rig it might only be useful to mine Bitcoin.
As for repurposing hardware, that might work with GPUs (although their value depreciates pretty quickly) but the Antminer is a custom ASIC, so it can't do a lot more than bruteforce SHA-256.
So he would have been much better off just spending that 1,200 on Bitcoin rather than on a mining rig.
TL; DR Why economists don't like deflation.
And indeed, it couldn't possibly. The EMH almost guarantees that hobby mining can't be profitable once the coin is popular enough.
So given his current return, of 1.01 bitcoins, that means each 2.4 bitcoins mined use around the electricity that a US household does annually.
And people wonder why there are those of us who are concerned about the environmental impact...
The biggest mining operations have legal partnerships with local and national governments.[1] As well, Russia isn't a major place for bitcoin mining: instead, mining is mostly concentrated in Georgia (the country, not the state) and China.
[1] http://ifact.ge/en/bitfury/
Mostly they're concentrated around cheap hydroelectricity, with major mines in Labrador (2c/kwh), Central China (varies, but <4c/kwh), and Georgia (unknown, bitfury likely has a special deal with the local government). A few exceptions are Northern China (coal grid @ ~3c/kwh) and Iceland (geothermal @ maybe 5c/kwh, this isn't too clear either).
Solar panels are not effective for bitcoin mining, because hardware needs to run 24/7 (a shitload of batteries are needed) and the upfront cost is high.
Why?
Now if the price of solar electricity is completely free and bitcoin doesn't crash then mathematically there'll come a point when you'll break even but it might take a long while as the mining rewards keep dwindling as difficulty increases while you spend most of your time not mining. Eventually your miner hardware or solar panels will need maintenance and that will increase your costs.
You'd have to do the math to see how long it'll take you to break even, but something tells me that it won't be nearly as competitive as those server farms using cheap hydroelectricity.
The problem is that you have the difficulty going up, and the capital costs.
Track those three curves and you have a good sense of the window for profit.
I pay my VPN using bitcoin. Also have a GPU bought with bitcoin. Just saying.
That's a real world use case.
> Every time I ask, people come and say but... but... international transfers! and I point it out that for that transfer the sender needs to buy bitcoins, transfer and the receiver needs to sell them because there is no legal, useful application of it :) And this is untenable, you can't have the receiver go through hoops to receive money. And when I compare this to how Transferwise combines a fantastic user experience with favorable rates (which I actually compared to an FX company not to a bank) then I am a Transferwise shill despite it's usually not me who brings up the transfer argument so I now I did just so we don't need to have that conversation again and again.
People are cheering this crap because they hold coins and when ordinary people get burned they shrug and say "you shouldn't have done that". Ordinary banking systems have a number of brakes built in so that people do not lose their money in an instant -- at least not that easily.
As an example, more than one person made the mistake of typing in an Ethereum address instead of copy-pasting and losing their money in the process. Or when someone's account on an exchange get hacked and thieves walk away with the money the usual answers are "why you didnt have 2fa" or "why did you leave money in the exchange". If someone hacks my online account they can't do an outgoing transfer to a new address without verifying a code first -- that's 2FA -- and more likely than not, there'll be a daily/per transfer limit I can report to the police, contest the wire and so forth. There are remedies. If it's crypto"currency"? Sorry for your loss!
When I say, legit uses, and people say, VPN, I am like sure you want to do a public service of seeding Linux images and your evil ISP stops torrenting so you need to use a VPN. I get it. The fact that you are using an anonymous way to pay has absolutely nothing to do with the fact that the traffic you run through this VPN is breaking the law. Surely No True Scotsman or in this case No True Hacker News Reader would do such a thing!
When I say, legit uses, and people say, various businesses accept Bitcoin, no, they absolutely don't, they integrate the separate sell your bitcoin step into the checkout, the moment Bitpay dropped Canadian dollars, Newegg Canada dropped Bitcoin without a second's hesitation. No business wants Bitcoin on their books, that's a horror bookkeeping / accounting wise.
I maintain: all there is illegal money transfer out of China and more than a little hype with the occassional Ponzi and other scams thrown in. Just because sometimes VCs are on top of a pyramid scheme it doesn't cease to be a pyramid.
(1) snark on HN about HN talking about something—that's incongruent and supercilious;
(2) paste earlier comments into new threads;
(3) rant in a flamewar fashion. It never persuades anyone and it damages the commons.
In Europe, I split a 0.36 Euro SEPA fee for a 1000 Euro transaction between two different banks in two different countries.
Bitcoin would have cost me $3-5 if not more.
Except for paying people for services and goods with bitcoin? There are plenty of legal venues to use bitcoin.
>It's the worst sort of gambling: you do not even know the odds.
So...like all investing? lol. Like seriously dude what the fuck do you know? Can you please take your blowhard bullshit somewhere else?
The actual problem, especially in the past, was that you could pay for the hardware but not actually obtain it for months, by which point it was no longer profitable. Presumably, the manufacturers were using the hardware themselves during that period.
There are practical concerns as well, these machines are usually pretty poor quality and the immense heat + poor cooling typically means the chips will burn out one-by-one over time. The PSUs are especially poor and will burn out and need replacing as well. Getting a used ASIC means these will be problems sooner.
GPU prices: https://camelcamelcamel.com/search?sq=geforce+1060
Mining centric cards are being released as well: http://www.anandtech.com/show/11607/cryptocurrency-mining-ca...
If someone really knows their hardware engineering they could interface with GDDR5 memory on a custom board and mine as fast or faster than a GPU.
It's just a matter of how much money it will take to develop such a chip. I'd guess at least $2-5 million given how you'd need to fabricate it at 14nm or better to get sufficient performance, and that process can be a serious headache for smaller firms.
Ten R580 cards can really crank out hashes for Ethereum. For a GPU to keep up it's going to have serious memory bandwidth issues as that's one of the limiting factors in this brand of mining.
What you might see is someone getting a license to make "OEM video cards" and then produce a line of mining-optimized cards. Given the constrained supply across the board on any AMD GPU this would be an easy win for a company like MSI or Gigabyte that's already making GPUs. Strip off the useless ports, tune the memory bandwidth, and make them work over USB-C instead of PCI-e so you can really pack a system full of these things.
Making an external GPU that comes in a nice housing with USB-C interconnect would also sell well in the machine learning market where you wouldn't have to worry so much about shoe-horning GPUs in your case. You could just stuff them in a rack.
There's an argument that the cards will flood the market and won't have any resale value, though I'm not sure (plenty of people want the cards for gaming). In any case that's mainly applicable to AMD cards.
However, the reason I bought NVIDIA is at least I have 4x 1060's as a nice little CUDA box afterwards.
The computers were always on before we started mining so we don't consider the expense as a loss.
Smart money right now isn't in BTC, unless you think you can predict what's going to happen in the next six months and you're willing to keep it for a longer period. And, even then, you'd be better off selling it back to USD and re-buying when it likely falls back down to sub-$2000 in a month.
Where is it then ? I too would like to join the 'rich fast' bandwagon !
Tell me more.
Ah, so smart money is predicting what will happen with BTC in the next six months and acting accordingly.
> unless you think you can predict what's going to happen in the next six months
Ah, you can't predict what will happen in the next six months.
It should say: hobby miners barely break even over a year after the rise in bitcoin prices if they ignore the cost of power.
However, the difficulty of mining has gone up so much that they are unlikely to recoup the power costs going forward.