Is bitcoin mining worth it at this point?

November 29, 2013 11:36 PM

So bitcoins have gone up in value a lot recently. It's gotten to the point that supercomputer level processing power is being used in some mining rigs. Does it make any sense for the average Joe that has a single laptop to a few home desktops to spare at most to join a pooled mining coop like this? Or is it a complete waste of time and electricity?
posted by bookman117 to Computers & Internet (10 answers total)

Best answer: I've contributed to other threads on this, but decisively no. This is all, of course personal opinion but i'll explain my reasoning as i go on. That opinion is, that there is nothing meaningful to be gained entering in to this system now as an average joe. The only people who stand to gain anything positive are people who gamed the system earlier and still are now, and people who hold more than a couple bit coins right now(who are probably just cashing out, or speculating and waiting).

A lot of this by the way, is in retrospect. At the time with the available information it seemed like a bad decision to jump in for good reason. Hindsight is 20/20, staircase wit, etc. All applies. A lot of it is also, as i said, my own personal opinion and possibly slightly conspiracy theory sounding.

So with that disclaimer out of the way:

The whole thing was worthwhile right up until the ASIC miners started coming out... and then those companies all turned out to be full of shit. A small group of people manufacturing the miners were running them for their own benefit and dragging their feet on selling them, or possibly even paid off by each other to keep delaying the ship dates on those mining units. Those same ones you see in that photo of the huge setup in hong kong? until VERY recently, and even still now the average joe couldn't get their hands on even one of those boards. Lots of companies sold units with those boards in them(or multiple boards) and still haven't shipped. Many of these were sold as early as the beginning of 2012-ish and still haven't shipped. And since most places would only accept payment in bit coins, everyone is SOL. Smart!

I honestly get the feeling those units were developed entirely to pull the average joe willing to spend a couple grand on a good setup out of the running. Money could not be the only key to entry in to a serious level of the market, there had to be forced scarcity and true exclusivity.

What that achieved, is pushing up the difficulty within the bit coin system itself of the calculations to the point that any GPU couldn't even do much of anything anymore. And especially, couldn't do much of anything for the amount of power it was drawing and heat it was generating. The first jump like that was from high end desktop CPUs(and server CPUs) to GPUs, but then everyone just went to ye olde newegg and bought a bunch of 6950s/6970s. The ASIC miners did that again, but removed the "go and buy one" step as an option at all.

So other than the people who knew the right people, or got in on the right limited deal luck of the draw to get an ASIC miner everyone is essentially locked out of meaningfully generating anything now.

Meanwhile, the people who got in any time before ASIC miners hit the scene are laughing all the way to the fucking bank and doing donuts in their ferraris.

I know a guy who bought $20 worth when they were a bit over a penny, and $50-ish when they were about 2 cents. Yea. Do some googling on the people who were ordering people pizzas for a few thousand BTC when they were nearly worthless then too.

The gold rush is over. No average joe system will ever make a meaningful contribution even in a pooled setup like what you linked, and will use more energy than it will generate value. Even the people who managed to get ASIC miners are fucked now that there's systems like that huge datacenter of them up and running.(and imagine the ones you won't ever even hear about). In addition to that, in a laptop mining will shorten the life of the machine from perpetual high internal temps and/or thermal cycling at times you shut down or sleep the machine or quit the mining software to do other stuff. Unless you have like, a dell precision or high end thinkpad that can take basically anything until the sun burns out.

So yea, i think this is a dumb idea. Others can and should feel free to poke holes in my reasoning though.
posted by emptythought at 12:05 AM on November 30, 2013 [17 favorites]

I asked myself a similar question a couple months ago and decided that mining wasn't worth the money, or more importantly the time and hassle. So I took the money I would have spent on a mining rig and just bought some damn bitcoins on Coinbase.

If you want to automate your way to Some Bitcoin you could maybe try building an auto-trader. I've kind of been piddling with that but I've been too busy with deadlines to actually get down to really figuring out how to encode my theories about What Bitcoin Is Doing into algorithms I can plug into the open-source autotraders I got up on my Raspberry Pi.

But mostly right now? If you want some magic internet money then drop a couple hundred you can afford to lose on some bitcoin. It's too late for most people to conjure them out of thin air now.
posted by egypturnash at 1:43 AM on November 30, 2013

Best answer: Litecoin is a better option for this as it depends on ram, and resists parallelization and asics don't really help. It's had a big run up in price in the last week as well.
posted by empath at 4:21 AM on November 30, 2013

Best answer: I will chime in and say that I got all into this because I started reading these Bitcoin articles about how it was breaking $1000 and so like two days ago I was all like, "HEY! I don't understand anything about this but I like money and these people are rich so maybe I can still sort of get rich?"

I setup a little desktop with a GPU I had laying around to mine Bitcoin... and.. yeah. After letting it run for 12 hours or so, it quickly because apparent to me that the ASIC miners have basically ruined it for the regular folks.

SO! Not one to give up, I have jumped ship in the last 48 hours and started mining Litecoins. It appears to be pretty much the same except that they haven't started pumping out ASIC miners for Litecoins (yet), so you can still generate a little bit of something. For example, I've been letting my miner run each night for the last two nights and I now have 2/10 of a Litecoin.

So as soon as it increases in value 1000000000000000% I am totally fucking done with all of you. However, in the mean time, if you have any questions about how to set it up or what programs I use or whatever, feel free to ask.
posted by kbanas at 6:14 AM on November 30, 2013 [1 favorite]

Nah. Just wait for the current bubble to pop, buy back in when the market falls below half its eventual peak, and hold them until the next bubble.

Bitcoin is still very much a nerd thing. Every now and again there's a slow news day, some mainstream media org pushes out a Bitcoin story and a new bubble takes off. This will keep happening until Bitcoin becomes as mainstream as PayPal, which won't be for a few years yet. Until it does, there will be Ponzi gains to be had by fleecing the n00bs.
posted by flabdablet at 7:12 AM on November 30, 2013

Yeah, ASIC mining is where it's at & you're not going to get your hands on the chips very easily. There's no way you can realistically compete with a GPU setup mining BitCoin.
posted by pharm at 8:36 AM on November 30, 2013

Best answer: No.

Mining bitcoin is not worth it, and indeed has never been worth it. Bitcoin has, at a given time t, always been less valuable than the electricity expected to be required to "mine" a new bitcoin at time t. It's only value can be speculative, and for that you might as well purchase it and wait for its value to increase.

Put another way, since the beginning of bitcoin and the establishment of a bitcoin market, buying $1000 dollars in bitcoins has always been a better investment than using $1000 worth of electricity in pursuit of mining bitcoins.
posted by pmb at 8:39 AM on November 30, 2013 [2 favorites]

You can do the math. What hardware do you have and how is your hashrate? It's likely going to take a year+ to find a block (assuming average hardware and hashrates). And the difficulty is increasing by design. Did you see the discussions on bitcointalk yet?

I'd say it is not worth the hassle.

Besides the technical side there also is the political discussion. The exchange rate is very volatile, depending a lot on press coverage and political actions. At the beginning of 2013 one Bitcoin was worth around $10, mid year ~ $200 and now due to Silk Road being shut down and the Senate hearing it spiked. It is all very speculative though. BTC is not a currency yet in the sense that people do not use it to buy goods. They tend to hoard it and that can never be good for a currency. As soon as something better comes along, Bitcoins are done. Maybe MySpace and Facebook would be a good analogy. The only people who got rich with Bitcoins are the ones who got some early on, like Kristoffer Koch.
You could buy some BTC and play around with it, but it is hard to say what the future will bring.

Thailand banned Bitcoins this year. Poland shut down a big marketplace (Bitcoin24) and took Bitcoins worth millions offline. The Japanese Mt Gox also has bank accounts in Poland.
There are several cases of theft as well (Tradefortress, Bitcash.cz, Bitfloor and Bitcoinica to name a few). In the end you never know who you are dealing with on the other end even though they present nicely on the internet. Turned out that Tradefortress was run by a 18yo from suburban Sydney, he cried theft and took this site offline taking thousands of Bitcoins of this customers with it.
Bitcoins run past central banks. Virtual currencies are not controlled by governments (yet). At this point there is no way to involve authorities in case your BTC vanishes.
posted by travelwithcats at 8:42 AM on November 30, 2013 [1 favorite]

Response by poster: Thanks everybody!
posted by bookman117 at 2:58 PM on November 30, 2013

I bought a 'cheap' ASIC miner at the beginning of the year. I received it about 2 months ago. With the increase in price, it's pretty much paid for itself, including power costs. Of course, had I just taken the money that I paid for the thing and invested in the Bitcoins, I would have a hell of a bigger return on investment.
posted by defcom1 at 7:04 PM on November 30, 2013