
Bitcoin Mining Boom Sputters as Prospectors Face Losses - T-A
http://www.bloomberg.com/news/2014-04-11/bitcoin-mining-boom-sputters-as-prospectors-see-real-cash-losses.html
======
lelandriordan
I am a bitcoin miner and I have made a 8 BTC profit this year taking into
account electricity fees. A common misconception is that you need to actually
mine bitcoins to mine bitcoins. Instead over the last few months smart miners
have been ditching their Bitcoin ASICS and instead have been using old GPU
rigs and new scrypt(aka Litecoin) asics to mine through auto profit switching
alt-coin pools. These pools automatically mine the most profitable alt-coins
like Litecoin and Dogecoin, then take the earnings and automatically trade
them on exchanges for Bitcoins. While obviously profits are down compared to
last fall, I am still making a nice ROI everyday, even from the very first GPU
rig I ever built.

This week CEX/Ghash.io the largest bitcoin mining pool just launched their own
auto-switching pool [https://ghash.io/MULTI](https://ghash.io/MULTI) (Warning
must sign up through CEX.IO). This will probably be the biggest one soon as
its hashrate has tripled today already, but for the last few months the big
three have been the following:

[http://www.clevermining.com/](http://www.clevermining.com/)
[http://wafflepool.com/](http://wafflepool.com/)
[https://www.scryptguild.com/](https://www.scryptguild.com/)

This is an always up to date profitability comparison of these pools vs.
straight Litecoin mining made by Bitcointalk user Suchmoon:
[https://docs.google.com/spreadsheets/d/1VOAhFX1XRizdaTp71qnY...](https://docs.google.com/spreadsheets/d/1VOAhFX1XRizdaTp71qnYI5pRh9VIZEQ51LHuGUmxri0/pubhtml)

~~~
maxerickson
What's the ballpark cost of the hardware that you used to get those 8 BTC?

(It's interesting information for observers, of course people are turning on
hardware that will run profitably, but mild opportunities aren't going to
drive a whole lot of purchases)

Edit: If you have the rough 'replacement costs' floating around in your head
that's interesting too. So not your actual costs, the approximate cost of
bringing equivalent power online right now.

------
ghshephard
At one point, people used Graphic Cards (or, more specifically their GPUs) to
mine Bitcoins. Over the last couple years, dedicated ASICs eliminated graphic
cards, to the point where (according to eBay) - a $30 USB dongle [1] @ 1.6GH/s
is more efficient than any graphic card [2] which top up around 1GHs/ at the
high end.

Given that a _lot_ of graphics cards were purchased for the sole purpose of
mining bitcoins - I'm wondering if there is a huge surplus of cheap graphic
cards out there now?

Strangely enough - eBay still shows graphic cards that were popular for
mining, like the ATI Radeon 5970, still selling for around $300. [3]

I'm guessing that's evidence that the graphic card market wasn't wildly
impacted by bitcoin mining?

[1] [http://www.ebay.com/itm/Brand-new-AntMiner-U1-USB-Bitcoin-
Mi...](http://www.ebay.com/itm/Brand-new-AntMiner-U1-USB-Bitcoin-
Miner-1-6GH-s-2-2GH-s-Fast-
Shipping-/191098233391?pt=LH_DefaultDomain_0&hash=item2c7e57a22f)

[2]
[https://en.bitcoin.it/wiki/Mining_hardware_comparison#Graphi...](https://en.bitcoin.it/wiki/Mining_hardware_comparison#Graphics_cards).

[3]
[http://www.ebay.com/sch/i.html?_odkw=AMD+5970&LH_Sold=1&_osa...](http://www.ebay.com/sch/i.html?_odkw=AMD+5970&LH_Sold=1&_osacat=0&_from=R40&LH_Complete=1&_trksid=p2045573.m570.l1313.TR3.TRC1.A0.H0.XATI+Radeon+5970&_nkw=ATI+Radeon+5970&_sacat=0)

~~~
Scaevolus
People still use GPUs for mining scrypt-based coins (LiteCoin, DogeCoin, etc),
though ASICs for those started hitting the market recently and profitability
has slumped with bitcoin prices and difficulty increases.

------
api
The technology of cryptocurrency is cool, but Bitcoin has definitely been in a
ridiculous bubble. Seems to be popping, but you can never be sure.

~~~
vijayboyapati
Bitcoin is a bubble, but not in a bad way. All monetary goods display a
"bubble" phenomenon. Their price cannot be explained by their use demand alone
but by a monetary premium. This is true for gold and it's true for the dollar
(which has no use value at all, unlike gold). This idea is explained best by
MM in his bubble theory of money:

[http://unqualified-
reservations.blogspot.com/2013/04/bitcoin...](http://unqualified-
reservations.blogspot.com/2013/04/bitcoin-is-money-bitcoin-is-bubble.html)

Also see: [http://unqualified-reservations.blogspot.com/2011/04/on-
mone...](http://unqualified-reservations.blogspot.com/2011/04/on-monetary-
restandardization.html)

~~~
adventured
And approximately at the same time the bitcoin bubble ends, and the so called
experts and analysts are proclaiming the death of crypto currencies, that's
when you will know that crypto currencies are finally on their way toward the
mainstream. At least that's how things typically work when bubbles form around
new technology (eg the internet).

~~~
ohashi
Seems like extreme confirmation bias. Many just die.

------
mantrax4
Well, don't worry, malware writers will generate enough bitcoins to sustain
the system.

The cost of mining to them is practically zero.

~~~
ericb
While I'm not sure if you're joking about mining as theft, if you're not, what
you're saying makes perfect sense. Non ASIC based cryptocurrencies provide one
of the greatest botnet monetization schemes I can imagine. Low-risk, hard to
trace.

------
clef
There's no such thing as a free lunch, and many people believed they could
mine one lunch at no (or very little) cost and expect that lunch to last
forever. That's very unfortunate, but who wouldn't see that such a utopia
would come to an end. It's like thinking that electric cars will replace other
cars in 10 years or 20 years (there's too much at stake , the environment
being last on the list). Even if the public was to embrace a such a
"currency", governments would step in (and they did) realising they would have
no control. The very fact that it became an object of speculation and was
making people richer meant it wasn't a currency anyway, it was no better than
property, therefore spawned a bubble as a natural phenomenon.

Bitcoin, like Punk certainly isn't dead.

Bitcoin sounded and looked like the sex pistols a year ago, now it sounds and
looks like Green Day.

~~~
b0sk
There was a free lunch for the first movers which was the impetus for these
guys who moved in late and started losing money.

