I'm a little skeptical that someone can make a profit if they include the cost of the equipment. I mine scrypt coins and make about $2 a day in revenue (maybe $1.50 a day after paying for electricity). If I include the $600 for the cost of the computer, then I am probably never going to show a profit. Even though break even might seem to occur after about 300 days, it actually doesn't because the difficulty of any valuable coin will rise and revenue will fall as time goes on.
In other words, if I am going to spend $600 on a computer that mines dogecoin, then I might get more coins if I buy $600 worth of coins directly.
I would be interested in any data you have related to the profitability of mining scrypt coins.
Topic: Some beginner questions, and answers - result of a PM exchange on this board (Read 720 times)
April 28, 2014, 06:27:08 PM
April 27, 2014, 05:39:10 PM
This post is indeed a good read ...especially for newbies. I wonder why none replied to it ?
March 01, 2014, 03:41:02 PM
Hi all,
As some of you know, I am a relative newb (a month ago I'd have said "Utter Newb") to cryptocurrency and these boards. I've made a personal project of learning all I can. Today, I got PMd by someone who has been reading some stuff I wrote, and I've asked for (and received) permission to post the exchange here. What I post may be inaccurate in 100 ways. That is the purpose of posting it
If anything I have advised here is wrong, please PLEASE correct me and update - the point of the whole thing is to collect some good advice for newbies (like me) who need it. This is not a self-moderated thread, so you can ofc troll and flame, but it probably will not help anyone So, I ask, please keep it nice.
TLDR: Some good questions which I kinda took the answers for for granted. It's so easy to assume others are at your level of knowledge, even thought you are writing for newbies. Bit of a wake up call for me. In any case, hope this is of help to someone, and as I mentioned at the start - corrections are VERY VERY welcome!
Here ya go:
Question:
, it has all the important info and anyone can see that you have done something from scratch. Good job. I think that
But I want to ask you, if I have free current what would be the best investment I could make with about 300-400$ , what hardware and what type of coins ?
And I saw that if you mine a new coin (sha or scrypt) that has a low difficulty and then change them to bitcoin you would be making money much faster than actually mining for bitcoins. It that true, have you tried it ?
Answer:
Hi there! Thanks for the comments, I really appreciate it Smiley Your feedback about is something I agree with, and I'll be making a lot of changes to it over time. To be honest, I
With free electricity you're in a good place. The hardware question is tricky to answer without a little more info, but I'll give it a go:
If you already have a working machine, and wish to just add hash power to it (i.e. a graphics card) then I'd say check out pricing on the following cards:
Radeon 7950
Radeon 7970
Radeon R9-280X (essentially a rebranded 7970, but runs a bit cooler)
Radeon R9-270X
If you find that the 280X is a bit over budget but close-ish to the R9-270X, I'd suggest maybe stretching a bit to get the 280X, because the difference is hash rate is quite significant. The 7950 is a great card, but they are so hard to find.
If you need to actually build a system, then I'd go with something like:
- Asrock H81 BTC motherboard
- The cheapest socket 1150 processor you can find
- The cheapest 4GB PC-12800 RAM you can find
- A really cheap SATA hard disk, anything more than 300GB and you will be fine OR (if you are a linux user) a cheap 8GB USB stick to boot linux from
- A *decent* power supply of about 750 watts (room to expand)
- You don't need a case as you can run it open, but make sure no kids are around to stick their fingers in the electrical parts! I have a 3yo and I JUST BARELY caught her in time as she was putting a fork into the motherboard...needless to say the machine got moved quite quickly after that Tongue
The board/processor/RAM/Disk should not cost more than about $150 combined, which allows you about $250 for a PSU and a card. With regard to the PSU, you can get away with smaller, but bear this in mind...the more power you have available, the more cards you can add to the system. So while I advise 750W, you could go to 500W (that will handle one card only), or as high as 1000W (which should handle 3 cards no problem). You'll need to choose here, because $250 is stretching it when you need to by both PSU and your card. I'd probably buy a cheap 500W for $30 or so, and spend the remaining $220 on a R9-270X - if you can pick one up at that price, it's a solid buy. Just bear in mind that the PSU is essentially going to be a throwaway component - it'll never supply a second card, and cheap PSUs don't tend to live long when you run them at load over a long period of time.
But! It'll get you mining Smiley And from there you can get some fins saved to buy better gear - that's what I am doing.
The above all relates to buying mining gear, which I choose to view as a resell able investment - many MANY people will advise you to invest in coins instead, and forget mining, which is actually good advice too. I could not recommend any other coin but Bitcoin and Litecoin at the moment, but bear in mind that it's REALLY volatile, and you need to be in for the long haul. It might well be that this is where the good money is, but it's honestly just a judgement call.
I need to move computers, so I'll PM you again in a min to address your last question. Phew, sorry for being such a windbag hehe Smiley
Part 2 Smiley
Firstly, a quick explanation of SHA and Scrypt - not a mathematical one, because I am not expert, but they are basically different in that they require different methods of solving really nasty hard math equations. The problem with SHA coins is that people have developed powerful custom-made machines specifically to deal with this, and they're (a) out of the price range of most and (b) not my scope. Scrypt is going to go down the same road eventually (google Gridseed ASICs) but for the next ~12 months at least it'll be perfectly viable (and profitable) to mine using a home computer. There are also a lot of variants of Scrypt emerging which should keep the custom-hardware crowd at bay for a long while.
To relate that directly to what you asked...Bitcoin is a SHA coin, so the mining of that has been the province of the big operators for a while now. The days of someone mining successfully on a home PC are gone unfortunately. But you are correct in what you suggested - you mine the Scrypt coins and exchange to Bitcoin (or Litecoin, which is also a good currency). There are three main strategies here -
1) Join an auto-exchange pool. These pools simply accept your mining power and point it at a coin of their choosing, convert everything to Bitcoin for you, and then pay you at regular intervals in Bitcoin. This is mainly what I am doing, and I usually use www.clevermining.com (there are others like middlecoin.com and multipool.us which are also reputable and successful).
2) Pick a smaller alt-coin which seems like it has a future (Dogecoin is the best example I can give), then either solo mine it (not recommended) or join a pool for it. You'll get payouts in this coin, which you can then choose to hold onto or exchange on places like Cryptsy.com to coins of your choice. People who use this strategy generally hold some and trade some, but it's a personal decision, and a bit of homework is recommended Smiley
3) Follow the coin launches - a good place for info on this is www.altcoincalendar.info (EDIT: URL fail). You jump on the coins right at launch (while the difficulty is low and the blocks are easier to mine) and grab a few very quickly. Then you wait for them to (hopefully) hit an exchange. You trade them to Bitcoin or whatever when you reckon the price has peaked, and then start again with the next launch. This is potentially the fastest and most profitable way to go, but it requires alot of hands-on time, and you should be prepared for a good percentage of mined coins to be absolute duds. I am doing this currently with Fatecoin, but I don't know if it will ever go anywhere. I'll mine this weekend and hang on to what I get, in the hope that it may be successful and my holding will be worth something. Ultimately, the aim will be to convert to Bitcoin or Litecoin (I personally like Litecoin, hence all the mentions).
Anyhow, to summarise...
Mining or investing is a personal decision, and there are valid arguments for both. I like the hobbyist side of mining, so that is what I have chosen, but I am not claiming to be correct in my decision Smiley A big part of it is based on my hope that the hardware I invest in will have a decent resale value if the arse falls out of the entire crypto thing (which I don't believe it will, but for sure we'll see some downturns over time).
If you do go into mining, I hope this info has helped - my situation is very similar to yours budget-wise, but I am fortunate to have a "base" system I can just add a card to, so that allowed me to get a R9-280X, which is a good balance of money/hashrate. I'll be putting in a bit more money next month, which hopefully should earn me enough to buy more hardware with Bitcoin ONLY the following month. The plan I have on my blog is way too simplistic at the moment, but I'll be updating it over the weekend, so it might make more sense/be more transparent once that is up - I'll let you know.
Lastly, forget about SHA256 coins. They are monopolised by the ASIC (custom machines) crowd, and us newbs don't stand a chance unless you've got $50,000 hanging around to invest. In which case you'd still struggle to make any money. There is a new algorithm called SHA-3 which is still viable however, so keep an eye out for that too - could be the next big thing, and I'd count it a positive on a new coin which uses it.
You've kind of inspired me to write an article on how to pick a decent alt-coin to jump on at launch actually....might just get cracking on that today Cheesy
Sorry for so much text! What can I say? I'm a windbag!
Rit.
Question:
I really appreciate your long post because it gives me much more info and comes with many important details.
Good to know that your kid is safe . That could have been a big problem.
I am currently mining for doge coins. I like the fact that you can make a large number of them (even if they are worth very little) but I hope than in time they will grow and will make a profit out of them .
For this time I am only using my current laptop to mine just to see how the whole system (trading, encrypting, software etc.) works to have a better idea.
With the rig that you described I think that I will be getting around 750 Kh/s . Mining with Doge I saw that a would be making 3$ a day. Is this close to reality ? And If I may ask how much is your rig providing without the electricity cost ?
Answer:
Doge is a good choice, and I agree with it. I'll be jumping on that boat myself. My opinion on the coin is that it'll do well (i.e. rise) for another few weeks, then it'll go sharply down, so I think it's a good coin to hold some of for now, and hope to sell off when it starts to turn down. Then again, I could be wrong, because a few of the heavy-hitters have invested in it big time, and they alone could guarantee it's success. Just speculation from me ofc Smiley
Using your current laptop to figure the thing out is a good idea before you spend any money - that's exactly what I am doing. My current setup is a fairly low power nVidia card, which gives me about 250Khash, but I have made a few coins. Funnily enough though, I have made my best gains with just CPU mining from the standard windows wallets. That because I jumped on new launches though - for example, Quark made me a few quid, because I got it early and found some blocks.
If you go with a R9-270X, you should expect about 500Khash. Checking out my pool, that would be approx 0.006 BTC per day, which is about $3.39 per day based on current BTC value. If you go for a R9-280X, you could expect approx 750KHash, which would give you approx $5.09 per day. Please bear in mind though that these figures are based on (a) having 100% mining time - you won't, nobody does Smiley (b) Bitcoin value staying at or above that value and (c) actually getting those hashrates. Cards take a bit of tuning up before they give their best, so you might be slightly lower before you find the sweet spot. There are lots of articles on tuning for best performance, but one of the best is Cryptobadger's (http://www.cryptobadger.com/build-your-own-litecoin-mining-rig/).
I just ordered yesterday a R9-280X, which I am hoping will arrive Monday and I can get set up in the evening. I'll be amazed if I don't run into at least 10 different setup problems, so I'll be documenting that too, along with solutions. As of then, I'd hope to be hashing at 750Khash (with luck) and will be updating my BTC balance regularly.
Coinwarz.com is a good place to go if you're manually switching to the current most profitable, but bear this in mind...the figures are based on a fairly small timeframe, so what can happen is that the big boys (100 megahash mining farms) can jump on the one at the top and drive the difficulty to the moon in just a few minutes. The profitability for the little guy (like you and me) plummets. So if you are using that technique, maybe go with the second or third best option on the day - it's the 90/10 rule. 90% of people watching go straight for number one, which means that over the course of a few hours, the 10% on number 2 or 3 actually do way better.
I went off on a ramble there again, but hope I answered what you were asking Smiley Please feel free to PM me any time with questions, I'm generally watching the boards live (except for sleep ofc!).
Rit.
Oh, one last thing....
My plan is to get to the point where my rig is "self-sustaining" - that is that I can make enough BTC in a month to buy a new upgrade at the end of it. My reasoning is that you should get more for your BTC than you would for its equivalent value in cash simply because there are so many people speculating that BTC will rise. For example, I recently saw a guy selling a nice graphics card for 0.71 BTC, which was exactly what newegg.com were charging for the card when you converted on the day. But he sold in the end for 0.4 BTC simply because he wanted the Bitcoin, not the cash. You might well get more value that way, so think about it Smiley
Rit.
As some of you know, I am a relative newb (a month ago I'd have said "Utter Newb") to cryptocurrency and these boards. I've made a personal project of learning all I can. Today, I got PMd by someone who has been reading some stuff I wrote, and I've asked for (and received) permission to post the exchange here. What I post may be inaccurate in 100 ways. That is the purpose of posting it
If anything I have advised here is wrong, please PLEASE correct me and update - the point of the whole thing is to collect some good advice for newbies (like me) who need it. This is not a self-moderated thread, so you can ofc troll and flame, but it probably will not help anyone So, I ask, please keep it nice.TLDR: Some good questions which I kinda took the answers for for granted. It's so easy to assume others are at your level of knowledge, even thought you are writing for newbies. Bit of a wake up call for me. In any case, hope this is of help to someone, and as I mentioned at the start - corrections are VERY VERY welcome!
Here ya go:
Question:
But I want to ask you, if I have free current what would be the best investment I could make with about 300-400$ , what hardware and what type of coins ?
And I saw that if you mine a new coin (sha or scrypt) that has a low difficulty and then change them to bitcoin you would be making money much faster than actually mining for bitcoins. It that true, have you tried it ?
Answer:
Hi there! Thanks for the comments, I really appreciate it Smiley Your feedback about
With free electricity you're in a good place. The hardware question is tricky to answer without a little more info, but I'll give it a go:
If you already have a working machine, and wish to just add hash power to it (i.e. a graphics card) then I'd say check out pricing on the following cards:
Radeon 7950
Radeon 7970
Radeon R9-280X (essentially a rebranded 7970, but runs a bit cooler)
Radeon R9-270X
If you find that the 280X is a bit over budget but close-ish to the R9-270X, I'd suggest maybe stretching a bit to get the 280X, because the difference is hash rate is quite significant. The 7950 is a great card, but they are so hard to find.
If you need to actually build a system, then I'd go with something like:
- Asrock H81 BTC motherboard
- The cheapest socket 1150 processor you can find
- The cheapest 4GB PC-12800 RAM you can find
- A really cheap SATA hard disk, anything more than 300GB and you will be fine OR (if you are a linux user) a cheap 8GB USB stick to boot linux from
- A *decent* power supply of about 750 watts (room to expand)
- You don't need a case as you can run it open, but make sure no kids are around to stick their fingers in the electrical parts! I have a 3yo and I JUST BARELY caught her in time as she was putting a fork into the motherboard...needless to say the machine got moved quite quickly after that Tongue
The board/processor/RAM/Disk should not cost more than about $150 combined, which allows you about $250 for a PSU and a card. With regard to the PSU, you can get away with smaller, but bear this in mind...the more power you have available, the more cards you can add to the system. So while I advise 750W, you could go to 500W (that will handle one card only), or as high as 1000W (which should handle 3 cards no problem). You'll need to choose here, because $250 is stretching it when you need to by both PSU and your card. I'd probably buy a cheap 500W for $30 or so, and spend the remaining $220 on a R9-270X - if you can pick one up at that price, it's a solid buy. Just bear in mind that the PSU is essentially going to be a throwaway component - it'll never supply a second card, and cheap PSUs don't tend to live long when you run them at load over a long period of time.
But! It'll get you mining Smiley And from there you can get some fins saved to buy better gear - that's what I am doing.
The above all relates to buying mining gear, which I choose to view as a resell able investment - many MANY people will advise you to invest in coins instead, and forget mining, which is actually good advice too. I could not recommend any other coin but Bitcoin and Litecoin at the moment, but bear in mind that it's REALLY volatile, and you need to be in for the long haul. It might well be that this is where the good money is, but it's honestly just a judgement call.
I need to move computers, so I'll PM you again in a min to address your last question. Phew, sorry for being such a windbag hehe Smiley
Part 2 Smiley
Firstly, a quick explanation of SHA and Scrypt - not a mathematical one, because I am not expert, but they are basically different in that they require different methods of solving really nasty hard math equations. The problem with SHA coins is that people have developed powerful custom-made machines specifically to deal with this, and they're (a) out of the price range of most and (b) not my scope. Scrypt is going to go down the same road eventually (google Gridseed ASICs) but for the next ~12 months at least it'll be perfectly viable (and profitable) to mine using a home computer. There are also a lot of variants of Scrypt emerging which should keep the custom-hardware crowd at bay for a long while.
To relate that directly to what you asked...Bitcoin is a SHA coin, so the mining of that has been the province of the big operators for a while now. The days of someone mining successfully on a home PC are gone unfortunately. But you are correct in what you suggested - you mine the Scrypt coins and exchange to Bitcoin (or Litecoin, which is also a good currency). There are three main strategies here -
1) Join an auto-exchange pool. These pools simply accept your mining power and point it at a coin of their choosing, convert everything to Bitcoin for you, and then pay you at regular intervals in Bitcoin. This is mainly what I am doing, and I usually use www.clevermining.com (there are others like middlecoin.com and multipool.us which are also reputable and successful).
2) Pick a smaller alt-coin which seems like it has a future (Dogecoin is the best example I can give), then either solo mine it (not recommended) or join a pool for it. You'll get payouts in this coin, which you can then choose to hold onto or exchange on places like Cryptsy.com to coins of your choice. People who use this strategy generally hold some and trade some, but it's a personal decision, and a bit of homework is recommended Smiley
3) Follow the coin launches - a good place for info on this is www.altcoincalendar.info (EDIT: URL fail). You jump on the coins right at launch (while the difficulty is low and the blocks are easier to mine) and grab a few very quickly. Then you wait for them to (hopefully) hit an exchange. You trade them to Bitcoin or whatever when you reckon the price has peaked, and then start again with the next launch. This is potentially the fastest and most profitable way to go, but it requires alot of hands-on time, and you should be prepared for a good percentage of mined coins to be absolute duds. I am doing this currently with Fatecoin, but I don't know if it will ever go anywhere. I'll mine this weekend and hang on to what I get, in the hope that it may be successful and my holding will be worth something. Ultimately, the aim will be to convert to Bitcoin or Litecoin (I personally like Litecoin, hence all the mentions).
Anyhow, to summarise...
Mining or investing is a personal decision, and there are valid arguments for both. I like the hobbyist side of mining, so that is what I have chosen, but I am not claiming to be correct in my decision Smiley A big part of it is based on my hope that the hardware I invest in will have a decent resale value if the arse falls out of the entire crypto thing (which I don't believe it will, but for sure we'll see some downturns over time).
If you do go into mining, I hope this info has helped - my situation is very similar to yours budget-wise, but I am fortunate to have a "base" system I can just add a card to, so that allowed me to get a R9-280X, which is a good balance of money/hashrate. I'll be putting in a bit more money next month, which hopefully should earn me enough to buy more hardware with Bitcoin ONLY the following month. The plan I have on my blog is way too simplistic at the moment, but I'll be updating it over the weekend, so it might make more sense/be more transparent once that is up - I'll let you know.
Lastly, forget about SHA256 coins. They are monopolised by the ASIC (custom machines) crowd, and us newbs don't stand a chance unless you've got $50,000 hanging around to invest. In which case you'd still struggle to make any money. There is a new algorithm called SHA-3 which is still viable however, so keep an eye out for that too - could be the next big thing, and I'd count it a positive on a new coin which uses it.
You've kind of inspired me to write an article on how to pick a decent alt-coin to jump on at launch actually....might just get cracking on that today Cheesy
Sorry for so much text! What can I say? I'm a windbag!
Rit.
Question:
I really appreciate your long post because it gives me much more info and comes with many important details.
Good to know that your kid is safe . That could have been a big problem.
I am currently mining for doge coins. I like the fact that you can make a large number of them (even if they are worth very little) but I hope than in time they will grow and will make a profit out of them .
For this time I am only using my current laptop to mine just to see how the whole system (trading, encrypting, software etc.) works to have a better idea.
With the rig that you described I think that I will be getting around 750 Kh/s . Mining with Doge I saw that a would be making 3$ a day. Is this close to reality ? And If I may ask how much is your rig providing without the electricity cost ?
Answer:
Doge is a good choice, and I agree with it. I'll be jumping on that boat myself. My opinion on the coin is that it'll do well (i.e. rise) for another few weeks, then it'll go sharply down, so I think it's a good coin to hold some of for now, and hope to sell off when it starts to turn down. Then again, I could be wrong, because a few of the heavy-hitters have invested in it big time, and they alone could guarantee it's success. Just speculation from me ofc Smiley
Using your current laptop to figure the thing out is a good idea before you spend any money - that's exactly what I am doing. My current setup is a fairly low power nVidia card, which gives me about 250Khash, but I have made a few coins. Funnily enough though, I have made my best gains with just CPU mining from the standard windows wallets. That because I jumped on new launches though - for example, Quark made me a few quid, because I got it early and found some blocks.
If you go with a R9-270X, you should expect about 500Khash. Checking out my pool, that would be approx 0.006 BTC per day, which is about $3.39 per day based on current BTC value. If you go for a R9-280X, you could expect approx 750KHash, which would give you approx $5.09 per day. Please bear in mind though that these figures are based on (a) having 100% mining time - you won't, nobody does Smiley (b) Bitcoin value staying at or above that value and (c) actually getting those hashrates. Cards take a bit of tuning up before they give their best, so you might be slightly lower before you find the sweet spot. There are lots of articles on tuning for best performance, but one of the best is Cryptobadger's (http://www.cryptobadger.com/build-your-own-litecoin-mining-rig/).
I just ordered yesterday a R9-280X, which I am hoping will arrive Monday and I can get set up in the evening. I'll be amazed if I don't run into at least 10 different setup problems, so I'll be documenting that too, along with solutions. As of then, I'd hope to be hashing at 750Khash (with luck) and will be updating my BTC balance regularly.
Coinwarz.com is a good place to go if you're manually switching to the current most profitable, but bear this in mind...the figures are based on a fairly small timeframe, so what can happen is that the big boys (100 megahash mining farms) can jump on the one at the top and drive the difficulty to the moon in just a few minutes. The profitability for the little guy (like you and me) plummets. So if you are using that technique, maybe go with the second or third best option on the day - it's the 90/10 rule. 90% of people watching go straight for number one, which means that over the course of a few hours, the 10% on number 2 or 3 actually do way better.
I went off on a ramble there again, but hope I answered what you were asking Smiley Please feel free to PM me any time with questions, I'm generally watching the boards live (except for sleep ofc!).
Rit.
Oh, one last thing....
My plan is to get to the point where my rig is "self-sustaining" - that is that I can make enough BTC in a month to buy a new upgrade at the end of it. My reasoning is that you should get more for your BTC than you would for its equivalent value in cash simply because there are so many people speculating that BTC will rise. For example, I recently saw a guy selling a nice graphics card for 0.71 BTC, which was exactly what newegg.com were charging for the card when you converted on the day. But he sold in the end for 0.4 BTC simply because he wanted the Bitcoin, not the cash. You might well get more value that way, so think about it Smiley
Rit.
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