• Post Reply Bookmark Topic Watch Topic
  • New Topic
programming forums Java Mobile Certification Databases Caching Books Engineering Micro Controllers OS Languages Paradigms IDEs Build Tools Frameworks Application Servers Open Source This Site Careers Other all forums
this forum made possible by our volunteer staff, including ...
Marshals:
  • Campbell Ritchie
  • Liutauras Vilda
  • Tim Cooke
  • Jeanne Boyarsky
  • Bear Bibeault
Sheriffs:
  • Knute Snortum
  • paul wheaton
  • Devaka Cooray
Saloon Keepers:
  • Tim Moores
  • Stephan van Hulst
  • Ron McLeod
  • Piet Souris
  • Ganesh Patekar
Bartenders:
  • Tim Holloway
  • Carey Brown
  • salvin francis

Grokking Bitcoin

 
Ranch Hand
Posts: 400
  • Mark post as helpful
  • send pies
  • Quote
  • Report post to moderator
Hi,

I've read that it is no longer profitable for individuals to mine Bitcoin.
What are your thoughts on individuals getting involved in Bitcoin mining ?
Does the cost outweigh the reward?

thanks,
Paul
 
Author
Posts: 11
5
  • Mark post as helpful
  • send pies
  • Quote
  • Report post to moderator
Hi Paul!

I'm not an expert on the mining industry, but I can provide some elaboration.

When individuals mine, they usually connect to a so called mining pool to mine cooperatively with other miners. The pool acts as a single miner to the outside world, but it's comprised of several miners. All miners of a pool share all that pool's rewards proportionally to their contributed hash power.

The nice thing with joining a mining pool is that you get tiny rewards often insted of big rewards randomly every XX years. You'll get paid a little every time your pool finds a block. You probably don't want to buy a mining rig for $2k and then hope that your rig will find a block within reasonable time, for example two years, because that won't happen.

Big mining companies often enjoy advantages like cheap electricity deals with power companies. Individuals mining at home (in a pool or not) can of course use solar and other cheap sources, but it's a hassle to set up.

Mining equipment today is highly specialized, so using your laptop, or graphics card will definitely not be profitable. To enter the game you need to get state-of-the-art equipment to be competitive, and to stay competitive you need to keep pace with technology advancements.

Thank you for your question
 
Greenhorn
Posts: 1
  • Mark post as helpful
  • send pies
  • Quote
  • Report post to moderator
Hi Kalle,
I don’t fully understand the interest in Bitcoin or any other crypto-currencies really. Why would someone want to use another “monetary unit” which has even less backing than any governments’ fiat currency? Being entirely digital seems to make it akin to vapor-ware and criminals have already been seen taking advantage of this by “disappearing with” huge sums of BitCoin, i.e. - Mt. Gox for example. How can any private individual have a sense of trust for this system?
Thanks,
Tim Richards
 
Saloon Keeper
Posts: 5775
146
Android Mac OS X Firefox Browser VI Editor Tomcat Server Safari
  • Mark post as helpful
  • send pies
  • Quote
  • Report post to moderator
My impression is that these days the main factor (though not the only one) in whether mining will be profitable or not is the price of electricity. If you have to buy electricity from a provider at the prevailing retail rate, there's no chance it will be profitable. It might have been 5 years ago, but no longer - too much computational power is needed to mine one bitcoin now.
 
paul nisset
Ranch Hand
Posts: 400
  • Mark post as helpful
  • send pies
  • Quote
  • Report post to moderator
Joining a mining pool definitely makes senses.It's an interesting idea .
Whether it's a good use of natural resources/vast amounts of energy to produce a concept of money is another thing.
Thanks .
 
Kalle Rosenbaum
Author
Posts: 11
5
  • Mark post as helpful
  • send pies
  • Quote
  • Report post to moderator

Timothy Richards wrote:Hi Kalle,
I don’t fully understand the interest in Bitcoin or any other crypto-currencies really. Why would someone want to use another “monetary unit” which has even less backing than any governments’ fiat currency? Being entirely digital seems to make it akin to vapor-ware and criminals have already been seen taking advantage of this by “disappearing with” huge sums of BitCoin, i.e. - Mt. Gox for example. How can any private individual have a sense of trust for this system?
Thanks,
Tim Richards



Hi Tim!

I can't speak for everyone, but I find Bitcoin interesting because it solves real problems. Traditional currencies are prone to

* inflation and hyperinflation (see Zimbabwe and Venezuela for recent examples)
* Mass surveillance of all non-cash payments
* Arbitrary censorship
* Arbitrary seizure

Bitcoin solves this by removing all central points of control. This is essentially what this book is about; How it can work without a central point of authority.

As a result of being free from a central point of control, there is no one to go to when bad stuff happens, for example when Mt Gox became "Empty Gox. When the money is stolen, there's no way to revert the thief's transaction. The thing with Bitcoin is that the security of your money is up to you to manage, and when the money is stolen it's not the system's fault, its the user who couldn't protect its own money. Bitcoin as a system has not been hacked a single time, but a lot of exchages' wallets have. Over and over. We are still in early immature days regarding wallet security.

I think criminals will take advantage of this infrastructure just as they take advantage of other infrastructure like roads and cellphone networks. If they do, it's in a way a sign that the system works as intended. Also, since there's no central point of control, there's no way to shut the Bitcoin system down, so we'll have to live with it no matter what we think about it.
 
Kalle Rosenbaum
Author
Posts: 11
5
  • Mark post as helpful
  • send pies
  • Quote
  • Report post to moderator

Tim Moores wrote:My impression is that these days the main factor (though not the only one) in whether mining will be profitable or not is the price of electricity. If you have to buy electricity from a provider at the prevailing retail rate, there's no chance it will be profitable. It might have been 5 years ago, but no longer - too much computational power is needed to mine one bitcoin now.



Hi Tim

Yes, you're absolutely right. That's the most important factor. If you can't get cheap electricity, you're pretty much toast. The more expensive the electricity, the more efficient mining you need to be profitable. As an extreme, if you have free electricity you'd be profitable mining using your laptop (not taking into account the cost of wear and tear on your laptop of course).

I think that once solar energy gets more mainstream and cheap, people will start to use bitcoin mining as a way of monetize their overcapacity instead of selling it to the power grid. There are people currently experimenting with this. I've very excited about it, but I don't do it myself.
 
Kalle Rosenbaum
Author
Posts: 11
5
  • Mark post as helpful
  • send pies
  • Quote
  • Report post to moderator

paul nisset wrote:Joining a mining pool definitely makes senses.It's an interesting idea .
Whether it's a good use of natural resources/vast amounts of energy to produce a concept of money is another thing.
Thanks .



There are plenty of good articles that discuss the environmental impacts of BItcoin. Here are some that I recommend:

https://www.ccn.com/bitcoin-mining-key-stat-exposes-ridiculous-energy-consumption-fud (1)
https://popeller.io/index.php/2017/12/10/bitcoin-environment-argument/ (2)
https://www.zerohedge.com/news/2017-12-11/no-bitcoin-wont-boil-oceans (3)

Among the responses to the criticizm of Bitcoin's energy consuption are:

* Bitcion uses mostly overcapacity from renewable energy soruces like hydro. (3)
* Bitcoin has in it's 10 years of existence consumed (mostly renewable) about as much as US cars (mostrly fossil) do in three days. Also other comparisons are interesting, for example the power consumption of gold mining. (1), (3)
* Bitcoin is deflationary, which will reduce peoples will to consume, which will reduce emissions (2)

So I think the
 
paul nisset
Ranch Hand
Posts: 400
  • Mark post as helpful
  • send pies
  • Quote
  • Report post to moderator


There are plenty of good articles that discuss the environmental impacts of BItcoin


Hi Kalle,

I'll check out the articles you posted . I agree traditional metal mining does an incredible amount of environmental damage.
Your points about Bitcoin solving some problems like runaway inflation are good. That is also the rationale behind gold mining. The value of any type of monetary instrument is very subjective. It's worth something if enough people agree its worth something .

cheers,
Paul
 
He's giving us the slip! Quick! Grab this tiny ad!
professionally read, modify and write PDF files from Java
https://products.aspose.com/pdf/java
  • Post Reply Bookmark Topic Watch Topic
  • New Topic
Boost this thread!