
Don't mine Bitcoin, mine Altcoins - jhabdas
https://hackcabin.com/post/dont-mine-bitcoin-mine-altcoins/
======
sorenjan
All this crypto currency mining and speculation is a perverse form of wasting
resources. While most people talk about energy conservation others keep buying
hardware they don't need to burn electricity 24/7 so they can "create" made up
resources to sell to other speculators online.

~~~
RationPhantoms
And let's quantify the waste of resources by storing vast buckets of useless
data people put on the internet. Snapchat, Instagram, Facebook, Google Plus.
What about the PoP's the house the IP transit traffic? How about the thousands
of advertisement/Spam companies that just add to the noise? Telemarketers and
their like (legal and not).

Surely there is a better argument to be made here. Speculative "mining" on
consumer purchased hardware is hardly near the top of global wasted resources.

~~~
jondubois
Yes, pretty much everything in our current economy is extremely inefficient.
In terms of waste, cryptocurrencies are peanuts.

\- Facebook ad spending is a waste; do companies actually get a ROI on all the
money they give to Facebook? They don't actually know! In the grand scheme of
things it's a complete waste. If Facebook didn't exist, then companies
wouldn't be forced to pay it money just to stay relevant; they could focus
their funds on actually improving their products instead. Not to mention the
enormous amount of otherwise productive human hours that Facebook is
responsible for wasting every day. That's not even counting all the other
social networks.

\- Gambling; $240 billion per year; the money does nothing for society. The
amount of money spent on gambling every year is MORE than the total market
capitalization of all cryptocurrencies added up together. So even if you think
that buying a cryptocurrency is gambling, your odds are much better (and
improve as you do more research). If people stopped gambling on horses and
lottery and started gambling with cryptocurrencies instead, the total market
cap for cryptocurrencies would be much higher than it is now.

\- Sports; the sport industry makes $75 billion per year. Yes it's
entertainment. So is trading cryptocurrencies.

\- Tobacco industry makes $35 billion in PROFITS per year. Doesn't add
anything positive to society. I think that if you were to add up all fees
(profits) ever charged for transferring cryptocurrencies, you wouldn't get
anything close to $35 billion.

~~~
Mahn
> Facebook ad spending is a waste; do companies actually get a ROI on all the
> money they give to Facebook?

Yes they do, and yes they know. Facebook is very effective at reaching
qualified leads, it's not "likes" or "engagement" what advertisers are buying.

~~~
jondubois
Maybe for a small subset of the total advertising spend, but for the big
players, they can't always be sure which part of their revenue can be
attributed to Facebook and which part can be attributed to other sources or
which part can be attributed to their sheer scale (everyone knows about Coca
Cola, but that won't stop the company from spending big on advertising).
Companies like Procter and Gamble started scaling back their Facebook ad
spend; they had no idea what their FB ROI was until they actually started
scaling back and they realized that it was essentially $0.

~~~
bira
If they can't measure their ROI, big or small the players, it's their fault,
not Facebook. It's not that hard to deploy direct marketing campaigns and
monitor conversions. It's actually the ABC of online marketing.

------
tinfoilman
Make up your own mind but Minergate has a rep for stealing your hash and lower
hash speeds than if you do its yourself

[https://www.reddit.com/r/BytecoinBCN/comments/6dh2ci/minerga...](https://www.reddit.com/r/BytecoinBCN/comments/6dh2ci/minergate_is_a_scam/)

[https://bitcointalk.org/index.php?topic=1975859.0](https://bitcointalk.org/index.php?topic=1975859.0)

[https://steemit.com/blockchain/@carlagonz/6xhcnh-
minergate-s...](https://steemit.com/blockchain/@carlagonz/6xhcnh-minergate-
scam)

~~~
epmaybe
If you "do it yourself" what would the net profit be including the cost of
hardware and electricity?

~~~
soggypretzels
That question is as impossible to answer as "if I started an apple orchard how
profitable would that be".

~~~
epmaybe
Why? Assume that the value of these altcoins do not change, and see how many
you can mine given a certain amount of time. The value of altcoins could very
well go down, but for the sake of demonstration you could still calculate a
very rough estimate, no?

~~~
OJFord
> _Assume that the value of these altcoins do not change, and see how many you
> can mine given a certain amount of time. The value of altcoins could very
> well go down, but for the sake of demonstration you could still calculate a
> very rough estimate, no?_

And likewise if you assume values for the cost of apple seeds land, see how
many apples you can grow given a certain amount of time - and the value of
apples could very well go down - but for the sake of demonstration you can
also calculate a very rough estimate of apple orchard profitability, no?

------
chatmasta
An unfortunate side effect of the recent ICO boom, specifically the many
"altcoins" built on ethereum, is a conflation of terms between "altcoin" and
"smart contract," and therefore also what it means to "mine" a coin.

Yes, these ethereum "altcoins" are just as tradeable as any other crypto coin.
However, it would be more accurate to refer to them as "smart contracts,"
because you cannot "mine" them in the traditional sense of redirecting CPU
cycles.

Let's define "mining" an altcoin as receiving that altcoin in exchange for
services. For example, you can "mine" BTC or ETH by providing the _service_ of
compute cycles. Then how do you "mine" an altcoin that is really an ethereum
smart contract? The service could literally be anything, depending on the
contract. It could mean anything from leasing disk space, to freelance
programming.

If you have a generic mining rig setup, you can probably redirect it to mine
ETH, BTC, or any CPU based proof-of-work coin. But your CPU can't freelance
for people. It can't lease disk space. It can't fulfill any arbitrary ethereum
contract.

There needs to be a distinction between the term "altcoin" and "smart
contract," because even though you can trade them both on exchanges, the
process for receiving the coin in exchange for services can vary widely. It's
misleading to refer to "mining BTC" and "mining <insert smart contract here>"
as interchangeable ideas.

------
tlrobinson
First of all, past increases in price shouldn't be used to calculate mining
profitability. If you want to speculate on the price, just buy directly on an
exchange.

It's a bit misleading to only show coins that have appreciated in value.

It's odd the article doesn't mention the different mining algorithms. It's
definitely not profitable to CPU or GPU mine any SHA256 coins, given ASICs are
~10,000 times more power efficient. Yet he suggests CPU and GPU mining, then
says he's considering buying Antminers?

~~~
Grangar
Just the fact that the author suggests Minergate as a good option speaks
volumes about his understanding of the crypto market.

------
freech
I don't know about altcoins but I doubt learning about new ones and setting
them up is worth your time.

The electricity mining Bitcoins costs with a normal CPU/GPU though is
definitely more then you're going to make. (Even if your PC is on anyway, just
the added cycles.)

EDIT: This is a good place to remind everyone that most people in the original
gold rush lost money, their health and years of their lifes for nothing.

~~~
Klathmon
Bitcoin is far past the point of being profitable with CPU or GPU, but there
are many coins out there that are more than profitable for most americans (it
has to mainly do with electricity cost in your area how much it will be
profitable)

~~~
cryoshon
can you provide any examples? i'm very skeptical because generally any coins
that are viable with GPU mining are very quickly made not so by an influx of
miners...

~~~
Klathmon
Ethereum is still more than worth it for me. At my electricity rates (which
are a hair above the national average), it costs me very roughly $1 a day (I
calculated actual usage numbers a bit ago for various algorithms but I don't
have them on hand) to run an old R9 390 I had laying around (and the 390 is a
VERY power hungry card).

Hashing Ethereum, i'm making around $2 USD per day from that card. Hashing
ZCash I'm making about $1.70 USD a day from that card. (both without any real
optimizations). Also that's pre-power-consumption-cost, so the "profit" is
$1/day and $0.70/day respectively.

There are others which cut it even closer, but there are other people who live
in areas with cheaper power that make even those worth it.

It's not the cash-cow it was in it's hayday where people were making $5-10 per
card in some cases, but for me it's still a nice $200 a month in profit in my
bank account from just older equipment I had laying around and about $100 in
parts and stuff to run it in my garage. Accounting for the several hours I put
into setting it up makes the money less worth it, but it was fun for me to do
so I'm happy with it.

~~~
_joel
Have you done the sums compared to if you just put $200 into BTC and watched
the price increase?

~~~
Klathmon
I have, and depending on how you do it I could either be ahead or behind.

If I would have "invested" only the $120 that I've spent on equipment so far,
i'd be significantly worse off than I am with mining. (Remember, I started
this process with a handful of older/unused GPUs, so the only stuff I bought
was an extra PSU, some risers, and a few odds and ends here and there).

If I factor in the selling of the unused GPUs that I had laying around that
I'm using for mining, I'd still be at a bit less than I am now (assuming I got
the "market rate" and sold them at a good time). Realistically I wouldn't have
sold them, since I didn't already and had some of them for a few years. They
would have just collected dust in my closet like they were.

If I "pretend" that I invested as much as I'm spending in electricity each
month into bitcoin and sold it off in a manner similar to how I get paid
mining (in other words, "buy in" a few $ per day, selling all of that back at
the end of the month), i'd be slightly better off, but that's only because
bitcoin went from $2700 to like $4000 in a few freakin days!

------
shubb
How much 'real' transaction goes on through these alt coins?

Bitcoin enabled trade accross borders without going through banks, and with
the possibility of evading normal money launderng proceedures.

Ethereum offered fascinating new applications like DAO, providing new ways of
trading in funds and structuring companies.

Possibly there would be space for a zero knowledge alt-coin in dark pools and
for mediating illegal tranasctions. But I don't think there is a market leader
yet.

The huge majority of these alt coins are bucket shops. Surely that should
effect the way we talk about them.

There are a lot of bucketshops these days. American gambling laws make it
better to pretend to be legitimate. I wish America would just legalize online
gambling.

~~~
jameskegel
My friends and I settle up our beer tabs or things like that with Aeon, a
Monero like currency popular in my age bracket.

~~~
shubb
Thanks - here in the UK Monzo (a startup but more or less a traditional bank)
is filling that niche, and I'd not hear of Aeon. I think a mobile privacy
platform like that has a lot of potential but you'd need to make it very easy
to buy the coins too.

~~~
jameskegel
Ah yes, happy to help you in any way. Thanks to the asic resistant mining
algorithm we are able to generate coins fairly reliably with CPUs that are
already in our desktops and inexpensive GPU arrays that we have pieced
together from Newegg.

------
zMiller
"According to a team at Bloomberg News, at one point last year the U.S. had
lent, spent or guaranteed as much as $12.8 trillion to rescue the economy"
[http://www.pbs.org/wnet/need-to-know/economy/the-true-
cost-o...](http://www.pbs.org/wnet/need-to-know/economy/the-true-cost-of-the-
bank-bailout/3309/)

HN is truly a hub for a great set of minds in the tech community but when it
comes to crypto it just amazes me how myopic opinions can be.

------
ilitirit
You can mine alt-currencies on some exchanges which pay out in bitcoin. This
allows you to "mine" bitcoin on unfeasible hardware.

I used zpool.ca for a while when Blake2s alts were highly profitable. I don't
know what the best alt-coins are these days. It tends to fluctuate quite
rapidly.

~~~
Klathmon
Along those lines is a service called "NiceHash". They basically sell your
PC's "hashing ability" on various algorithms to buyers.

This ends up acting like you the "seller" of hashing power getting paid in
bitcoin to hash whatever altcoin is most profitable at the moment.

They have an auto-switching GUI client for windows, and allow you to point
basically any miner that they support the algorithm at their service and get
paid in bitcoin at a roughly comparable rate to mining the actual coin.

~~~
ilitirit
The problem with these exchanges is you can never be sure what your actual
return is going to be (this is true to an extent for all coins, but the effect
is not as big for the more established coins that you mine directly).

Suppose there's altcoin called ALT which can be mined very quickly and is
worth let's say $0.00001 per coin. Mining a block takes 5 minutes and the
payout is 10000 ALT coins or whatever. The 10000 coins are distributed across
the pool, and you determine that on your setup you should be able to mine $3
USD in terms of BTC a day on the pool. You get wind that ALT is about to get
pumped hard, which means your potential earnings could reach $20 per day (or
whatever).

What's the problem (ignoring exchange fees) with going "all in"?

Firstly, ALT coin may have a confirmation time of several hours or even days.
You can't sell unconfirmed coins.

Secondly, the exchange has to sell these coins elsewhere (usually another
exchange). Because of the low value, this other exchange may have a rule that
you can only sell in batches of 1 million. So even though you've mined X
amount of coins, you still have to wait for the batch to be fulfilled.

Thirdly once the batch is fulfilled, you still have to wait for it to be sold
on the other exchange.

And finally, the BTC <-> ALT exchange rate may fluctuate independently of
known factors.

By the time this happens, your ALT coin will almost certainly be worth a
different value to what they were when you first mined them.

It could be worth more or less, but the point is you can't efficiently
forecast on most alt-coins when you use exchanges like Zpool and NiceHash.
This is why they usually have several values for your "earnings" \- Total,
Unconfirmed, Confirmed, and Sold. It's also why "profit switching" algorithms
and techniques are kind of a silly idea for most alt-coins - you cannot
calculate profit based on current market values.

~~~
Klathmon
That's the nice part of NiceHash though, you never even own the alts in any
way.

You as a "seller" get paid in bitcoin per mhash/s (or whatever the unit is for
that algorithm). so if you are hashing "DaggerHashimoto" at 26Mhash/s for 24
hours, you are getting paid x btc per mhash/s

The "buyers" are basically then paying NiceHash to say "I want x ghash/s of
this algorithm and I want it going toward this mining pool and I'll pay you X
bitcoin for it." So then NiceHash plays the part of the broker and matches
that X bitcoin payment up with as many miners as is needed to reach the
threshold of ghash/s and takes a little off the top as a fee.

It's not perfect, you may end up taking a sub-optimal algorithm and making
less than you could have if you did it perfectly, but it works well enough
that I make profit in bitcoin.

~~~
ilitirit
Nicehash is slightly more stable but you end up in a similar situation since
the price per Mhash fluctuates in the same way. If you examine the
profitability chart it's all based on historical prices:

[https://www.nicehash.com/?p=calc](https://www.nicehash.com/?p=calc)

That's _usually_ fine for the bigger, more established alts (since the known
alts use the known algos - DaggerHashimoto, Equihash etc), but not for the
alts which can potentially generate the most profit in shorter periods of
time. So if a coin that uses some obscure algo gets pumped for a few days it's
going to skew the chart.

The real benefit of Nicehash is that it's more accessible for people who are
new to crypto mining. If you work out the numbers, mining ETH (for example)
directly is almost always more profitable than using Nicehash. Nicehash is
just simpler and more convenient.

~~~
Klathmon
Well of course mining the coin itself will be more "profitable", NiceHash is
charging about a 4% fee (closer to ~2.6% if you play their game). So on
average mining ETH directly will most likely net you 4% more.

But I don't want ETH, I want BTC. And while it's not a knock against ETH (It
seems like a really cool technology!), I just don't want to hold my money in
it and deal with it separately than I do my BTC. And I'm more than willing to
pay that 4% fee to be able to hold my BTC securely with the ecosystem I have
setup to sell and convert it to USD if/when I need to.

------
kpeterson
I'm very suspicious of the prices for some of these more exotic coins. If you
mine something like Golem or Pepe Cash with no name recognition, how do you
find a seller? The big exchanges don't sell them and finding a buyer yourself
is very time consuming. Seems like you're likely to end up with a lot of
cryptocurrency you cannot find a buyer for and a lot of wasted electricity.

~~~
aarreedd
You could trade it on shapeshift.io for Bitcoin and sell those.

~~~
bpicolo
Shapeshift still requires a buyer on the other end, though I'm not entirely in
agreement with the op. Seems like most relevant coins have some real volume

~~~
aarreedd
I am just pointing out that you do not need to go "find a buyer yourself" like
op suggested. I agree there is a lot to be suspicious about with new
coins/tokens.

------
rublev
More profitable to trade altcoins and get in on rumors then sell when they go
high, and cash out to BTC/BCC when you can. Problem with a lot of alts is they
don't go anywhere. If you were lucky and say mined NEO then you're fine, but
what about the other 100's of alts?

------
slammer123
I'm not sure about the other coins, but you can't mine NEO. You have to
purchase it.

[https://www.guidetocrypto.com/neo-neo/neo-neo-mining-
guide-v...](https://www.guidetocrypto.com/neo-neo/neo-neo-mining-guide-
version-2-0-1/)

------
ringaroundthetx
Multipool mining is nothing new, so it should be known that Minergate has a
shaky reputation.

My independent analysis of it is that there exists merely an optimization on
your mining yield by not using Minergate, but you will have to do that
calculation yourself based on your mining hardware, electricity costs and
throughput, and determine if the convenience makes up for the possibilities of
alleged resource theft.

Mining pools pay out directly to any designated address, and so they don't
store your earned funds at all. The risk of impropriety is very low, but
miner's yields are also low enough that they would still complain about minor
variances in mining pools.

------
jameskegel
I never thought there would be so many irrational, dissenting opinions for a
newer sector of tech. Some of the guffaws in this thread are astonishing; this
is the most uninformed I have ever seen HN.

------
_wdh
Where did the data for the growth rate table come from? I can see that the
original source is a reddit post but I can't find where the reddit post got
it's numbers from.

~~~
ringaroundthetx
coinmarketcap.com

but there are many others like that site, its just historical price data.

------
beepboopbeep
Woof. It's frightening how quickly these crypto threads get toxic with foam
mouthed, wide eyed cultists.

~~~
HugoDaniel
And yet the political threads are the ones that get censored (among so many
others)...

~~~
beepboopbeep
I'm 100% ok with political threads being censored here. I'd immediately stop
bothering with this site if that toxin got unleashed here.

------
rashthedude
The majority of newer coins cannot be mined since they based on PoS.

------
fiatjaf
I want to mine Ethereum when they start using Proof-of-Stake, because my
computer is from the 2000's. Will I be able to do it?

~~~
ilitirit
You can't "mine" using Proof-Of-Stake (POS). I don't know which algorithm they
will choose when/if they eventually do switch to POS, but one method is that
the wallets that store the most ETH have a higher chance of being selected to
perform some inexpensive computation. You get paid for performing these
computations.

So to answer your question, you could potentially use your old PC to host your
POS wallet and earn ETH. The amount you will earn will depend on how much you
currently have and how long your are connected to the network.

------
quotha
Money is not everything you know

------
lightedman
Quit wasting power on this nonsense, period! As of right now, Bitcoin alone
accounts for more power usage than the entirety of Iceland. All that pollution
for a non-tangible currency you can't even fold up and make a paper airplane
out of, or eat, or even wipe your butt with.

~~~
Sean1708
While I understand the argument that mining cryptocurrencies is a waste of
energy, I don't understand why cryptocurrencies are any worse than keeping
money in a bank. Do you keep all your money as cash? Am I missing something?

~~~
disgusting_guy
Money kept in the bank is guaranteed by your government to retain (some)
value; it is backed by the economy of your country. Bitcoin is not backed by
anything other than speculation on implied value

------
crimsonalucard
This site recommends a program called minersgate. My virus scanner when off on
it. Looking online it seems to not legit.

------
cheez
All the cryptocurrencies are pump and dump. It's a perfect space for people
who normally trade currencies because they are generally not invested in the
currencies.

So I wholeheartedly support pumping and dumping tons of cryptocurrencies. It
has been free money for a while now.

