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Ask HN: Have you made a profit mining Bitcoin?
34 points by cdvonstinkpot 284 days ago | comments
Hi,

I'm interested in hearing people's experience mining bitcoin, especially if you've made a profit.

How much do you have to spend on hardware to keep up with network difficulty these days?

I'm currently considering a Group Buy of 38 330 MH/s USB ASIC Miners, and am concerned about rising network difficulty potentially preventing my recouping what I spend on the hardware: Miners, & Hubs.

I don't have thousands of dollars to spend on TH Miners which would seem to be able to outrun difficulty in the short term.

What are HN'ers experiences mining Bitcoins?

Thanks,

-C



alexjarvis 284 days ago | link

The best advice I ever received was over 2 years ago whilst on holiday in Canada. A dude there said that he'd spent $6000 CAD on mining equipment (GPUs) and had made a cool $15000 - but he said that he would have made more if he'd of just bought the coins.

Rewind to just over a year ago and I place a (pre)order for 5 ASIC miners (from Butterfly labs) for a total of $3250. When the things arrived, a year later, I was lucky that they were still profitable at the time (mid August) as the price of BTC had risen but decided to sell them on eBay for ~$3000 each because not only were they ridiculously loud and I had no where to put them but the difficulty was ~60 million and increasing (and it's now 148).

I was lucky enough to pay off my credit card and still have some left over with the money I made from selling the miners. Although I made a decent profit, I would have made a lot more if I'd of just bought the coins for the same value (as they've increased ten fold in the same period).

Now I've invested around half of my profits back into buying coins and so have finally taken the original advice onboard. This and the current market conditions make even the best mining options from Cointerra seem like a risky investment at this stage.

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lectrick 284 days ago | link

Bought 2 FPGA miner rigs from BFL. One of their first customers to take that risk. Cost about 30 grand. Liquidated 2 of my 6 underperforming retirement funds to pay for it as I was unemployed at the time (yes I am a little crazy and obviously have no dependents).

I now have about 330 grand in BTC. After paying off the original investment (and then some) by selling off 1/3 my holdings when it was $230. I also paid off the upgrade to 3 ASIC mining rigs (4.5TH) which should ship... Imminently actually.

I also have a 6 figure developer job but Bitcoin has made me far more money so far (on paper) this past year.

I'm still bullish on it. Welcome to Internet Gold 2.0.

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d4vlx 284 days ago | link

The key here is that he got in early and sold at a great time. Right now asic miners are not profitable unless the price of bitcoins goes up substantially (1.5-2x). Then you have to factor in the fact the there are a lot of people out there willing to put down serious money on asics regardless of the current profitability. They have and will driven up the difficulty.

Buying ascis is very much a gamble at this point imo.

I made around 110 BTC mining primecoin, about 60 BTC of that is profit. I got in early and went hard. I consider the fact I did that well to be little more than luck.

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fbliss 284 days ago | link

Good for you and your brass nuts, man. However, I think what you risked underscores the reason why small miners will never be profitable - small risk, small reward. Big risk big reward. Those with capital to invest will leverage, those with modest investments should not be expecting huge returns.

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lectrick 284 days ago | link

Thanks. I knew it was a pretty big risk at the time but I spent about 2 weeks obsessed with it and doing my homework. Pored over the source code, forums, docs, concepts etc. (it probably helped that I'm a programmer). By the time I was done with that "homework" it felt less like a risk and more like a sure thing... although BFL at the time was also a big risk.

It took MANY emails with Sonny and Josh over there, back and forth, before I felt comfortable forking over that amount of cash. (They ended up giving me a discount, too.) The tone of the emails and the seriousness and some voice calls helped reassure me a lot that they were serious. I don't think that aspect of it can be discounted.

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MarcusVorenus 284 days ago | link

Pretty bold move. Nice to hear it paid off.

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navyrain 284 days ago | link

I've mined bitcoins, and have made a reasonable profit (~20ish BTC or so?). I mined in the GPU days, and while I currently run a small ASIC miner (BFL Jalapeno), it will likely barely be profitable.

The considerable risks and costs of getting into modern ASIC mining make it pretty unattractive at the moment. Until that changes, I'd advise anyone with a profit motive against investing a lot in BTC mining.

If you're confident that Bitcoin will go much higher, and are willing to wait a long while for it to happen, maybe it still could be worth considering. If you just like the idea of Bitcoin, getting a little ASIC miner for fun is entirely respectable. On the grand scale of things, bitcoin is still just a curiousity, and it doesn't hurt to dabble.

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trafficlight 284 days ago | link

With the rise of ASICs, the difficulty level is skyrocketing. I just picked up a Sapphire to play around with, but I'm not sure it'll ever break even.

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floatboth 279 days ago | link

I wonder if Litecoin mining is more profitable with GPUs?

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craigmccaskill 284 days ago | link

Add it all up (usb hubs, power bricks included too) and put the numbers into the calculator on the genesis block.

http://mining.thegenesisblock.com/

The 330MH/s miners were profitable if you bought them a few months ago but with the rising difficulty of the network, they don't seem likely to break even.

A more likely profitable venture would be to use the same money and buy into bitcoins. Secure your wallet and sit on it in hopes the price rises.

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throwaway420 284 days ago | link

If this was 2010 or 2011 or so, you'd have a really good shot, but not near the end of 2013.

It's certainly theoretically possible to make a bit of extra money, but I think it's probably much too late in the game to make a serious go of Bitcoin mining for the acquisition of wealth unless you somehow have a free source of electricity and/or hardware.

I think the guys who are really going to make some money off of Bitcoin mining going forward are the people who sell the specialized mining rigs.

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FlyingAvatar 284 days ago | link

GH/s per watt is everything. I'm pretty sure you're looking at the Sapphire USB miners. These are almost certainly not worth it. If you got 38 of these for free and had free power and started mining tomorrow, you would have perhaps $1500 worth of BTC a year from now.

Assuming you're buying and powering them yourself, you're paying around $1000 and $200 bucks in electricity. It's a fairly risky investment that will likely net you at most $300 on a $1200 outlay.

To summarize your purchase: 132 MH/s/watt for ~$1000

If you want to make a better risky investment, you might look into pre-ordering into one of the newer process ASICs, like Butterfly Labs' Monarch:

http://www.butterflylabs.com/monarch/

This purchase: 1.71GH/s/watt for $4680

The problem is you're pretty late in the game, so it's really hard to predict what the difficulty rate will look like in even a few months.

It's possible that your USB miners will be worthless in a few months due to the mass in flux of newer ASICs. It's also possible that so many people will be purchasing newer ASIC miners that ALL mining will become entirely unprofitable.

And all of this assumes the relative stability of the BTC/USD exchange rate. :)

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AdmiralBeotch 284 days ago | link

I mined in mid 2010 from my CPU. I was not a hardware guy, so I gave up in about 6 months. I have managed to keep every bitcoin key I've ever owned, with the exception of one small mistake that cost me 1 bitcoin. During this mining period, they were worth $0.06 up to $1. It took me those 6 months to have my first epiphany about the value of Bitcoin. But it was just one of several more monumental epiphanies to come over the next 3 years.

I bought in to the BFL pre-order during the first few days of the announcement. It took me 12 months to receive the hardware. During that time, Avalon beat BFL to market and destroyed my expected difficulty. Fortunately, the $1800 I spend on the hardware has paid me back over 10x in dollar amount. It will take me about another 6-9 months to break even on the bitcoins I spend due to the massive rise in value since I made the pre-order. Fortunately, I bought a good number of bitcoins at the same time so I've made out on both investments.

I have purchase a BFL Monarch during the first few days of the announcement, but I do not expect to make the money back in any reasonable amount of time due to the flood of new ASICs and coming changes in difficulty. Fortunately, I do not have power costs.

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kristianp 283 days ago | link

I'm a little confused by this pair of sentences, what are "the bitcoins I spend"?

"Fortunately, the $1800 I spend on the hardware has paid me back over 10x in dollar amount. It will take me about another 6-9 months to break even on the bitcoins I spend due to the massive rise in value since I made the pre-order."

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continuations 284 days ago | link

> I do not have power costs.

How do you get your power?

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kevinrpope 284 days ago | link

I've had leases with landlords where the rent includes all utilities. This amount of electricity is probably not what the landlord had in mind when writing up the lease, but could explain the lack of power costs.

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Groxx 284 days ago | link

Since ASICs are now "out there", the overall difficulty might not jump as quickly as when they were newer. But in general you'll be losing money (especially if you pay when you pre-order[1]), or possibly running pretty thin margins, unless you're way ahead of the curve (then you can make a lot. but that's unlikely to happen.).

It's a gamble, and it's a gamble Bitcoin is designed to prevent being too profitable. To be frank, I wouldn't suggest it.

To answer the title, I made about a quarter of a coin back when GPU miners were relatively new, on Slush's pool. And about 0.1 coin with my CPU prior to that. Otherwise nope :)

[1]: assuming the relatively-stable constant increase in bitcoin price keeps going, you'll very likely make way more just by buying the bitcoins then. that growth has survived every boom and bust thus far, completely unscathed, so it seems pretty likely to continue.

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teraflop 284 days ago | link

I have about 4.5 BTC that I mined in mid-to-late 2011, using an nVidia GPU whenever my PC happened to be on and idle. At the time, I was just about breaking even compared to the extra cost of power; since then, the exchange rate has increased enough that if I were to sell, it would end up having been nicely profitable.

Unfortunately, the time when you could pull that off without a large up-front investment seems to be long past. Personally, there's no way I'd consider sinking a large amount of money into mining hardware at this point. If you believe BTC has a promising future, it's much safer to just buy coins. (EDIT: but of course, given the volatility, that only makes sense as a long-term plan.)

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Hortinstein 284 days ago | link

I read about Bitcoin in June 2011 and built a miner using two ATI 5830s shortly after. It ran at ~550 megahashes and cost a total of $450.00 to build using newegg.

I live in an area with free power in Tokyo and let the machine run for ~2 years. During some of this time Bitcoin was hovering around $2.00. I was mining as a hobby since it cost no money and I believed in Bitcoin's potential.

In the second half of 2012 the price started jumping and I netted a very very nice return. I would not mine now as any real investment. I would like to believe Bitcoin's adoption will increase and the price will continue rising, but short term I think it's still quite the gamble.

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fnordfnordfnord 284 days ago | link

Mining? No. I have lost a small amount. Had a little fun. You might make a mint, but it is the wild west. You need to be able to spend a fair amount of time fussing with the things. My USB ASIC Miners would overheat and reset a lot until I put some heat sinks on.

>and am concerned about rising network difficulty potentially preventing my recoup...

Yup. You are wise to be concerned. If you want a nice boring low-risk investment, umm some ICA mutual fund maybe? But that's no fun.

Speculating, I'm a little bit ahead, and I have a lot more fun doing that.

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bitcad 284 days ago | link

I received 2 of the AVALON ASIC Batch 2 orders in July. They cost about 55 BTC (~$1500USD) each in February and now I have mined about 94 BTC ($13000) on each (running at about 83GH/s).

The daily mine total has decreased about 10fold, each making about 0.25BTC per day with the latest diff increase.

The cost per day in electricity is $1.50-2 so with current exchange rates and diff increases they should be 'profitable' until Feb-Mar next year (not even a full year).

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jzig 284 days ago | link

I took a page from the "selling pickaxes" manufacturers themselves. I purchased a Jalapeno in Aug 2012, then upgraded right before they doubled prices of the miners. Then I auctioned the preorder for 30BTC . Retail for the device was $1500 even though I paid $700. Sadly the coins were worth $6K while being held in escrow, and only worth $3K by the time I converted to fiat.

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syzo 284 days ago | link

I got in on it back when bitcoins were around $1 each. I sold 10btc at the first $30 bubble, and made enough to buy a new video card, and I still have somewhere between 60 and 70 btc left. Haven't touched it or payed attention to it much after that, besides checking the price every once in a while.

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dsirijus 284 days ago | link

I guess the "picks and shovels" rule holds for this gold rush too.

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xekul 284 days ago | link

Back in 2011, I mined enough BTC on my $1000 mining rig to eventually make a 5x profit, but there's no way I'd be able to make a profit today at the current difficulty/prices.

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solac3 284 days ago | link

From what I understand the USB type hardware isn't profitable.

You could see much better financial gains buying coins and hoping for the best or investing is something else.

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maaku 284 days ago | link

> I'm currently considering a Group Buy of 38 330 MH/s USB ASIC Miners

You will lose money. Don't do it. You will be better off just buying coins.

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debacle 284 days ago | link

It seems like, due to the deflationary nature of bitcoin, it would be more cost effective to just buy bitcoin outright now, instead of buying mining hardware.

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nwh 284 days ago | link

Nope. Made a tonne selling mining devices though. Paid my rent for a few months.

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drakaal 284 days ago | link

Yes. Having access to a few hundred computers that sit in computer labs all day mostly doing nothing, I used to fold proteins or search for Yeti. Now I mine.

But profit is kind of relative. I have made money. It is bankable, but I probably had more time in doing the initial setup than what I would have made if I had taken that same time and spent it doing something related to my primary job.

There is "Profit" there is "Revenue" and there is "a smart spend of my time". This met two of the three.

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teraflop 284 days ago | link

If those aren't computers that you personally own, please be careful to get the proper authorization and cover your ass. This reminds me of the David McOwen case from a decade ago: http://news.bbc.co.uk/2/hi/science/nature/1782050.stm

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gojomo 284 days ago | link

Even if those lab computers have GPUs, at current difficulty, whoever is paying the power bills is almost certainly paying more for the incremental electricity-use than the value of coins you're collecting.

So if you're doing this "now", you're not really making money from 'mining', but from theft. The mining is just obscuring the theft enough to allow it to continue. Perhaps there's some copper wiring or tubing on premises you could also take and resell while they're not looking?

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drakaal 284 days ago | link

As it happens they are in buildings where they are the primary heat source, and we first started protein folding to keep the CPU's over 50% so the room wouldn't freeze in the winter.

Students Remote access the desktops so they have to be always on, and they pop in and out at all hours of the day and night we did the math heating the room with PC's was cheaper than keeping the boiler on for the entire building.

Believe it or not there are people in this world who aren't thieves.

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hanley 284 days ago | link

I think it's still stealing since you don't own the hardware and don't pay for the power usage. Therefore the mined coins should be property of the department/school/etc. and would help them lower costs even more. Unless you have permission to keep profits obtained from the usage of those machines.

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drakaal 284 days ago | link

We trade for the tech support. Which means I'm making about 1/100th minimum wage.

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purerandomness 284 days ago | link

So, instead of folding proteins, which eventually results in benefits for all of humanity in the long term, the machines are now doing work that benefits only one person short-term.

Isn't this the exact same thought pattern we find in bank owners people protest against all around the world?

But let's not exaggerate - after all, it's just you and a handful devices. What difference would that make, right?

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drakaal 284 days ago | link

Folding proteins tends to benefit big Pharma, I don't feel so bad about that.

Who did SETI benefit? The Aliens?

Bit Coin which I don't really put much stock in, but thought it was fun to play with is in my mind a bad investment long term. I cash out the coins pretty regularly. But I like the idea of a unified currency. I don't like the idea of a currency you can make more of. In my perfect world there is a single currency backed by Gold that the entire world uses and you can trade your 1oz mark for 1oz of gold when ever you want.

BitCoin is closer to that than most anything else. So I like to support BitCoin for the benefit of humanity. Not because I believe it is the solution, but because I think those who think it is the solution will talk about it enough to convince those who can build the solution to do so.

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lgieron 284 days ago | link

That is so cool.

Did you do any research on increased wear of the hardware under load? That could be an additional cost that would start showing up only after a period of time.

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williadc 284 days ago | link

I work at Intel, and am involved with the "Reliability Verification" team for some of our client products. We design our chips to last 7 years when run well over the specced frequency on "viruses" that are much harder on the hardware than any realistic workload. Server teams have even stricter requirements.

If any hardware is going to see increased failure, I'm guessing it's the hard drives.

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drakaal 284 days ago | link

Servers do this all the time. Temperature change is harder on hardware than electrons flowing through it. They get replaced every 4 years or so, so very few die of chip failure. It is not like we are overclocking them.

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gojomo 284 days ago | link

OK, then. I don't believe everyone is a thief, but there are clearly plenty of actual thieves, and still others who can rationalize thievish behavior if laundered through a process like mining-on-someone-else's-utility-bill.

So this lab-mining is seasonal, or someplace (one of the poles?) where the building would be uncomfortably-cold year-round without the mining? Is it hooked up to the buildings' thermostats?

Using computing waste heat for practical purposes is a good idea. Running CPUs as heating elements, I'd need more info about their efficiency for that purpose, especially if the system isn't in a control-loop with a thermostat (and ideally peak-vs-off-peak electricity pricing). My hunch is they might be cost-competitive with electric space heaters but way more costly than any non-electric boiler heating system.

Maybe the bill-payer's value for (heating + novelty + cut-rate tech support) is greater than (marginal-electric-bill). But even if that were true a while ago, the difficulty escalation makes that far less likely now, especially for CPU mining, or a process that's not ambient-temperature-influenced.

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drakaal 284 days ago | link

School isn't in session in the summer. They run about 6 months a year.

Electric space heaters aren't particularly safe in a High School. Kids stick stuff in them they catch fire.

And this year hasn't really started yet so it is quite possible there won't be any money in it, and we'll find some new use for the CPU. Computing Prime numbers for the NSA perhaps.

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zapt02 284 days ago | link

that sounds illegal.

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philsnow 284 days ago | link

certainly unethical.

though if he's asked the university or whatever and they don't care, it's their money to piss away.

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jafaku 284 days ago | link

http://blockchain.info/charts/miners-operating-profit-margin

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wmf 284 days ago | link

That chart is for GPUs; it doesn't apply to ASICs.

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VLM 284 days ago | link

"How much do you have to spend on hardware to keep up with network difficulty these days?"

Financing will be your problem. Anyone else can buy that hardware and your profit (if any) is baked into the cake when you set the cost of renting that money and/or however you want to account for opportunity costs.

Or another way to put it is it's highly unlikely your financing cost (cost of the money traded to get the miners) is precisely zero, and when you factor it in, things get sketchier.

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nighthawk24 284 days ago | link

No

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