

Ask HN: does bitcoin mining pay off? - agranig

I'm curious whether there are people who do (semi-)professional bitcoin mining, for example with hardware like https://en.bitcoin.it/wiki/Mining_hardware_comparison, and whether this really pays off?<p>In the worst case, the costs for powering these devices is higher than the value of bitcoins mined, plus there is the risk of dropping exchange rates.<p>If it is somewhat profitable though, then I'm wondering why not more people are doing it, as it seems easy enough? If more people did it, would there be a risk of cannibalizing each others efforts? It might sound like naive questions as I don't know much about the mechanisms of bitcoins.
======
chanced
The reason more people don't do it is because:

A) it's difficult. Since the vast majority of miners didn't get in early, they
weren't able to get in on the "gold rush" that enabled them to ramp up
hardware in accordance with their output. When mining first started, you could
find blocks with a decent CPU. Since then, dedicated rigs have become almost a
necessity if you plan to make any kind of money at all.

B) Electrical efficiency. Since the recent decrease (reduction from 50 bitcoin
per block down to 25 per block) and the rise in popularity of bitcoin (thus
rise in difficulty of finding a block.. it scales naturally), the "cost" of
finding blocks has gone up. By that I mean it requires more raw computational
power to mine, raising the bar on both the hardware needed to be relevant AND
the amount of electricity consumed during the process.

There are a lot of calculators out there. They will give you some insight into
how much you could make (or very likely lose) depending on your local
electricity pricing.

~~~
agracey
Could you use something like AWS or EC2 to reduce the overhead?

~~~
dustcoin
No. CPUs are useless for mining, and the only GPU instance AWS offers uses
Nvidia GPUs, which are about 5x worse than the equivalent AMD/ATI GPUs. Even
if AWS had AMD/ATI GPU instances, the costs would probably be too high.

------
steven_h
It will pay off, but it's more a long term investment and you should an
opportunity cost analysis on the cost of hardware and expected returns.

Use this to calculate your profit. <http://www.bitcoinx.com/profit/>

Disclaimer: I mined bitcoins at the start and cashed out during the last
bubble at ~$30USD per coin. I sold the hardware I had (ATI 58xx series
graphics card mining rigs). The new ASIC hardware looks too great if you could
gt your hands on it.

Remember though that you are at a disadvantage to more established miners who
can afford these $X0,000 mining rigs that increase the total pool speed which
brings down your contributions and your profit.

------
gesman
If you can run your mining rig somewhere where you don't pay for electricity
(like under your employer's desk :) ) - then you'll get some benefits.
Otherwise electric bill will eat your profits.

I think it's a bullshit business where opportunity is guaranteed to decline.

Let others mine and I'll develop products and sell them for bitcoins (and
dollars).

------
cfaulkingham
I have been looking into it. From what I can tell the only way it would be
profitable is with a custom ASIC. Something like
<http://www.butterflylabs.com/products/>

~~~
chanced
As of right now, I'm still considering BFL vaporware. They've moved that
goalpost far too many times for them to be taken seriously.

------
redegg
I've been mining since July 2011 with a small operation of 17 ATI 5830s.

With the amount of ASIC preorders currently speculated, I don't think its
worth my time to upgrade. I'll be selling my mining hardware off this year.

------
undrcvr
Don't forget that according to the (non existant) spec there's a finite number
of btc. So even if it was profitable (which i doubt), it's guaranteed to stop
being viable when every block has been mined.

~~~
speeder
Except that this will take a while, and then fees will be collected by the
miners, and as Bitcoin price rises, fees don't need to be in the integer
amounts to be profitable.

