Topic: A case study in entry-level mining - page 4. (Read 53568 times)

That's something they don't teach you in mining school.

"The Re-invest"

With the difficulty climbs only way to stay in the game, is to re-invest into more hardware(buying new and selling old) with your profits every 3 to 6 months.

'Tis the way with technology.

I didn't realise that the difficulty has increased that much in only one year. Seeing how little profit miners make right now is a bit worrying. The game has changed and the "power" now seems to be with a limited number of big mining rigs.

Even if the difficulty stabilizes it will still be harder for anyone to get started on mining.

Enjoy the journey and experience

Similar tale here, started out of curiosity with GPU's, transitioned to USB based ASICs (my BE's are still hashing!), then a variety of other miners, including a few S1's.  Peaked at about 1.6 TH/sec.  Can't say that there was any financial gain (to the contrary), and most of my earned BTC was spent on mining hardware too.  No, did not find any blocks yet...

Cheers

Difficulty went from 15 million to 10 billion
Remembers mining a bit of change with a laptop 1 year ago
That was a total bust from a mining perspective but as an educational experience quite cool


I must admit in the last year we have certainly seen a lot more online services starting up it's been a good year more or less with the occasional disaster (gox) (inputs.io)

One Year Later

It's been a year since I began this experiment. In that time I have spent about AUD$2500 for a current balance of 0.67 BTC plus an Antminer S1 mining at 180GH/s. Difficulty has risen from 15 million to 10 billion. The current blockchain on my PC is 20GB (didn't check when I started). Bitcoins have risen from AUD$130 each to AUD$700 each, peaking at over AUD$1200. I have invested and reinvested 5 times. I have solved at least one block. I've had a lot of fun, a lot of frustration, and gained a whole lot of knowledge. You'd have to say that as an investment this has failed completely, but as a learning experience it has been worth it. Rather than speculating, I put up the cash to find out for sure whether this was worth doing. I haven't solicited any donations -- only technical assistance running my rig.

Funnily enough, I really haven't spent my bitcoins on anything besides mining hardware! I don't plan to cash out to fiat, but rather to save the BTC for future online services.

The only time I had trouble with MinePeon, it turned out to be a problem with my USB hub (not MinePeon).

I've been running MinePeon 24x7 for 11 months now, and with the exception of that one dodgy hub, it has been rock solid (still running as I type this)

I wasn't being serious, I won't use my 9 GPUs to mine BTC.  They can't even find a Darkcoin block at 2500-3500 difficulty, much less 8.85 billion (currently) for BTC.

This is exactly correct. People look at the current difficulty, and go 'Man, I'm going to recoup my investment in no time!', without realising that difficulty is - currently - on an exponential growth curve.

Here's one of the best calculators around, if you were to start mining with a S1 _now_.

http://www.evolyn.net/bitcoin/mining_calc.php?version_major=2&version_minor=4&presents=none&h=180&MinerPowerDrain=0&MinerCosts=428&MinerDeliveryTime=0&NetworkBlockHeight=302160&Difficulty=8853416309.1278&DifChange0P=%2B25&DifChange0A=0&MiscUSDBTC=1000&MiscUSDBTCChange0P=%2B0&MiscElectricityCosts=0.32&MiscCalculationLength=360&MiscShownIntervalLength=1&btn_startcalculate=true

After 120 days, you've actually recouped your investment.  You haven't paid for the electricity. Of course if you were to BUY one, today, you'd never ROI. (Really. Go set the 'delivery time' to 7 days. That's it, your window is gone)

It is an amazingly fine knife edge to balance on, and, I'm using a worse-case scenario for difficulty increases. However, with petahash of new products being shipped from factories over the next few months, I may be -under- estimating at 25% compound growth.

Even 9 gpu will take an extremely long time to find a btc block.    Im not sure but you might even have better odds buying a lottery ticket, its comparable anyway.       There are cheap old asic that are no longer worth it but at least dont use up any power, might as well use one of those over a gpu which could be useful doing something else

We thank you for your modest contribution to Global Warming....

I'm going to solo mine BTC with my 9 GPUs, then I'll get the whole 25 BTC reward all for myself!!!

Yeah, I've been looking at entering BTC mining, but even with free electricity and internet it's difficult to get a good return. The few miners I found that promise a (really good) return on investment are most likely scams. It seems safer to just purchase BTC and sit on them than trying to mine.

For now I'll pass on the mining. Thanks for sharing your experience.

Or you could do what I did last August and figure out that mining whatever alt coin is hot at the moment is far more profitable than mining BTC and securing the network.  To hell with securing the BTC network!  What has it done for you lately, besides cost you money?  All right then.

  When you up against companies its incredibly tough to beat them, as they can just write off their costs against their profits.
You are probably correct that its not paying profits immediately, however a company can carry losses upto 6 years forward so they can wait it out.   

If they make loss then big deal, the person can walk away from the business where a person doing always takes the hit up front

Alt coins are probably more suitable as they are more haphazard with markets appearing from out of nowhere with features not seen before.   That whole assessment favours the quicker mover that a single person can be.   we seem to be at a point with btc where its all about economies of scale, strange to apply to a distributed network

Hi Entry-level miner, would you like my Jupiter?

I put it on eBay for £50.

http://www.ebay.co.uk/itm/KNC-Jupiter-October-Batch-550-600-GH-s-/251531846462?pt=LH_DefaultDomain_3&hash=item3a9077633e

I have been pondering that myself for a while, the only way I see it working is if you have free electricity since difficulty increases with price or if you purchase something with fiat and see the price naturally appreciate over time like the early miners or had spare processing capacity to use, basically profitability is only achieved given time since it is never profitable to mine in the short term example early adopters had to pay for electricity but bitcoin had no value, and as the value increases so does the difficulty making it a chasing game.

That said given the case study your right holding BTC wins over using it to buy mining gear
Using Fiat to get gear to acquire bitcoins might be a bit different
Thanks for hanging in there so long though
Almost a year

Bitcoin adjustments seem to be happening every 12 days.

Pretty cool case study    if you ever plan on dumping those block erupters for cheap, please hit me up with a PM.

mining profitability is hard for sure, but the ants get you there, if only by just barely.

Musings

So my Antminer S1 has been plugging away for a while now, and it's providing me with an income of 0.01 BTC per day. Of course this will decrease as difficulty rises, but it's nice to have an automatic daily payout from BTC Guild while it lasts.

I'm disappointed at this stage. Each of my reinvestments has lost me more of my original BTC capital. As has been pointed out, my original 13 BTC for AUD$2000 would have been all I would ever have needed. Instead I decided to go all in with mining, and lost virtually everything.

What's really killing me here is rising difficulty. As ever-faster hashing hardware comes onto the market, return from mining rapidly decreases. You can either watch your income diminish into nothing, or reinvest at a loss. It's a lose-lose situation.

My major conclusion from this experiment is all hardware seems to have an effective lifespan of just a few difficulty adjustments (which occur approximately every two weeks). As every new generation of mining hardware enters service, current-gen hardware quickly becomes obsolete. This makes it extremely difficult to achieve ROI no matter what hardware you buy. Add in utility costs like power and bandwidth and you lose even more.

The other thing working against me was my stubborn insistence on using USB miners with MinePeon. I had to spend extra money on USB hubs which don't provide any return, and MinePeon itself wasn't exactly super stable either. Maybe if I had gone with different hardware things would have been different -- then again, maybe not. At least I didn't get scammed into buying something from Butterfly Labs.

I'm beginning to wonder how anyone makes a profit mining. It seems impossible from an individual's point of view.