Cryptocoin Mining?

[michal1980]

so if I wanted to buy a 79XX card today to start bitcoining can it pay for itself?

 

[blastingcap]

If you started several months ago maybe, but today that's looking less likely as difficulty went up over 11% last round. At that rate, difficulty will double in 6 weeks, and quadruple from today's difficulty level in 12 weeks, just in time for the halving of rewards in Dec. 2012. That's not even accounting for ASICs which can wipe out GPU mining several weeks from now. The only way GPU mining stays profitable past the reward halving is if you get free electricity, ASICs aren't online yet, and prices stay high. But prices are driven by demand for bitcoins, not mining difficulty, and nobody knows exactly where they will go. See my previous post in this thread about this.

 

[RussianSensation]

That's just silly, different currencies inflate at a different rate. A currency can even undergo deflation while another goes inflation. And currencies value relative to each other constantly fluctuates.

I was talking about overall currency inflation, all currency suffer from it as far as I am aware. To hedge against inflation, you don't buy other currencies, you buy other asset classes.

I can't take a piece of copper or silver and buy something in the store. Precious metals are not a currency, they may be used to make items of value or traded via financial instruments or bought in physical form and resold later to market participants. A precious metal is not a currency whatsoever, unless you live in a country that accepts gold bars as currency.

so if I wanted to buy a 79XX card today to start bitcoining can it pay for itself?

I agree with blastincap. There is a lot of risk involved right now to only buy a 79xx card for mining. If you intended to buy a gaming card, by all means get a 79xx and mine on the side. AMD already provides better price/performance than NV anyway. The mining would be a bonus. However, as blastincap alluded there is probably 2-3 months of reasonable mining left on the GPUs. I mean no one knows for sure, we are just guestimating the rises in difficulty and impact of ASICs from butterfly labs. You will still have 1.5 months of "safe" mining which will net you some $, but after that it's hard to say.

 

[taltamir]

You can actually protect against double digit inflation of a failing currency by switching out to a fiat currency with manageable inflation. It doesn't eliminate it entirely but it keeps it manageable.

Asset classes like oil, gold bullion, real estate, etc are good.

But you keep insisting that you cannot have a currency made out of precious metals:
http://www.goldeneaglecoin.com/Buy_...s/One_Ounce_Uncirculated_American_Gold_Eagles
http://www.monex.com/prods/silver_eagle.html
http://www.apmex.com/Category/2/Canadian_Silver_Maple_Leafs_2011__Prior.aspx

When you are investing in a trust fund that holds large quantities of gold and silver bullion it is an asset class. But when you are buying coins made of the stuff it is a Currency. And it can be used as an effective currency... of course if it did you wouldn't be able to rob the population blind via printing more worthless money.

 

[philipma1957]

I was talking about overall currency inflation, all currency suffer from it as far as I am aware. To hedge against inflation, you don't buy other currencies, you buy other asset classes.

I can't take a piece of copper or silver and buy something in the store. Precious metals are not a currency, they may be used to make items of value or traded via financial instruments or bought in physical form and resold later to market participants. A precious metal is not a currency whatsoever, unless you live in a country that accepts gold bars as currency.



I agree with blastincap. There is a lot of risk involved right now to only buy a 79xx card for mining. If you intended to buy a gaming card, by all means get a 79xx and mine on the side. AMD already provides better price/performance than NV anyway. The mining would be a bonus. However, as blastincap alluded there is probably 2-3 months of reasonable mining left on the GPUs. I mean no one knows for sure, we are just guestimating the rises in difficulty and impact of ASICs from butterfly labs. You will still have 1.5 months of "safe" mining which will net you some $, but after that it's hard to say.

I agree with this you could buy a pair of the hd7950 cards run them in one case and in 6 weeks net maybe a 100 profit. 2 cards at 600 or 610 minus 100 is two for 500.

if you were in the market for a 2 card setup 2x msi 7950 cards is a kick butt setup. pretty much will master any game.

What would be nice is Butterfly labs has a problem producing the asics. Giving you 4 to 6 months not 6 weeks..


I am running 2x 7950 and 1x 7970 at the moment .

I would have only had 1 7950x without bitcoins.

 

[Mir96TA]

so if I wanted to buy a 79XX card today to start bitcoining can it pay for itself?

if you can do 600 M/h + for 24 hrs........ Yea I can see that is happening......

 

[WhoBeDaPlaya]

What would be nice is Butterfly labs has a problem producing the asics. Giving you 4 to 6 months not 6 weeks..

As an owner of GPUs and a couple of BFL Singles, I kinda hope this happens. Sure do not want to double my investment in BFL just yet (trading in the singles for Jalapenos).

 

[Mir96TA]

^^^So do you own (possession) some of BFL ^^^

 

[Pheran]

As an owner of GPUs and a couple of BFL Singles, I kinda hope this happens. Sure do not want to double my investment in BFL just yet (trading in the singles for Jalapenos).

Seems like it would make a lot more sense to trade in singles for SC singles.

 

[Fire&Blood]

so if I wanted to buy a 79XX card today to start bitcoining can it pay for itself?

Like the other poster said, starting a 24/7 dedicated miner right away with a OC'ed core, you should be able to pay it off by the time Jalapenos start plugging in and likely reducing your output as the difficulty changes.

With Bitcoin mining, the number of coins dispensed in a given time period is fixed and self adjusting to the relative strength of the network. When the pre-orders are all tallied and the first production run ships, we're likely going to see lots of chaos as the total network hash spikes up with each block of BL units being plugged in, but eventually it should hit some kind of equilibrium.... At which point exactly the same number of coins will be dispensed to the people who own BL hardware, relative to the $$ they invested with BL.

That's what worries me. On one hand, we'll likely have the Jalapeno killing everything else's output, on the other hand, there is no way Jalapeno won't affect the BTC's price so not only is it likely to stop you from making coins, it will likely hurt your savings too. Causing many to completely give up the currency. I think initially, the benefit of being an early Jalapeno adopter will be similar to being one of the first to get the newest iphone and turning around and selling it for a ridiculous profit.

What would be nice is Butterfly labs has a problem producing the asics. Giving you 4 to 6 months not 6 weeks..

I certainly hope so. User base needs time to "prepare" if it's inevitable. Newest video cards have made things worse in the past but weren't nearly as harsh as the Jalapeno will likely be. User pool didn't suffer badly with difficulty changes because GPU transactions are much more appealing to users because of other primary and secondary ways to utilize it, unlike buying a dedicated mining unit.

Not a fan of BFL, even if BTC survives their products.

 

[SickBeast]

For now, things are profitable. Hopefully we can get a couple of months out of it before the difficulty gets insane. By that time we should have the 8xxx Radeons.

 

[Zargon]

Those aren't due for a while right?

Tapatalking on my pos thunderbolt. Sorry for teh typos!

 

[Binky]

The problem with bitcoins and the coming apocalyptic introduction of the asics is that most people are really, really bad at math. They will still keep mining even when the costs outweigh the revenue. By costs, many people think electricity costs only, but there is also the cost of your time, the cost of depreciation, and the pure annoyance factor. Electricity is easy to measure, depreciation is less easy to measure, and annoyance is impossible to measure for anybody but yourself. My own weighted breaken point is maybe $6 per bitcoin. Since they are currently at $10+, I'm happy. Once they drop, I'll stop. Will you?

I'm sure than many people will continue to mine if they drop to $2 each, thinking "they will recover." I personally love to hear/read this argument from tree-hugging government haters - they act like bitcoins will continue to rise in value for eternity. It might cost more in electricity to mine them but people will still continue. Um, yeah, you could buy "unlimited" amounts of coins at $2 each, why mine them if it costs you more than $2?

 

[Attic]

i expect to see a $20 BTC before I see a $2 BTC. I expect to see $2 BTC's within a year.

 

[RussianSensation]

But you keep insisting that you cannot have a currency made out of precious metals:
http://www.goldeneaglecoin.com/Buy_...s/One_Ounce_Uncirculated_American_Gold_Eagles
http://www.monex.com/prods/silver_eagle.html
http://www.apmex.com/Category/2/Canadian_Silver_Maple_Leafs_2011__Prior.aspx

When you are investing in a trust fund that holds large quantities of gold and silver bullion it is an asset class. But when you are buying coins made of the stuff it is a Currency. And it can be used as an effective currency... of course if it did you wouldn't be able to rob the population blind via printing more worthless money.

You are just making up an arbitrary definition of what a 'currency' is but that is not how currency is legally defined.

Those 3 coins you posted are just precious metals in the FORM of coins, not currency that's accepted by creditors. I never said you cannot melt a gold bar into 100 coins. But those coins aren't currency. In the past gold coins were accepted as currency. Today, I cannot go into a store and buy anything with them. Are those coins legal tender? This is no different than calling a cheque "currency". Cheques aren't currency either. A cheque is just an instrument that allows you to pay for goods or services by signing off a promissory note that your financial institution will transfer the stated amount to a 3rd party upon your written and lawful consent (I.e., signing and depositing the cheque). For example, a creditor can by law in Canada deny a cheque because it is not legal tender. You can't use a cheque to pay for items in Canada at a retail store if the store chooses to not accept it; much in the same way you cannot use those precious metals coins to pay for goods or services in a store. Currency is something that's accepted widely, precious coins are not. Can I go and spend a $1700 gold coin at Costco, BestBuy, Walmart to buy anything? No, I cannot.

What you are talking about is buying precious metals in the form of coins as a hedge against inflation. If the value of gold appreciates if market participants think there are inflationary pressures, then the value of that gold coin will also appreciate. You can later sell it to a market participant and convert it to USD that you can spend. Buying coins made of precious metals is not the same as buying currency (which means converting US dollars to Euro/Russian rubbles/British pounds, etc.).

Precious metals =! currency. Not in finance, accounting, economics or any field of study in business school, unless your creditor has specifically OKed that you can pay them for goods and services with precious metals. In that case it would be called a barter transaction (i.e., exchange of one good for another).

Currency = "currency in specified denominations that a creditor must by law accept in redemption of a debt"
Legal tender = "Any form of money that a government decrees must be accepted in payment of debts."

Coins made of precious metals are not legal tender currency. No creditor has a lawful obligation to accept them as payment for goods and/or services. They are also not publicly circulated as a currency is.

By the very definition of currency, it cannot change value relative to itself. It has a face value. A $1,700 gold coin may be worth $1,300 in 3 months. Thus it cannot be currency. A $100 US bill isn't worth $89 in 6 months. The purchasing power of the currency falls if there is inflation, but the nominal value of the currency doesn't change. In the case of the precious metals, the actual value is tied to the value of the underlying precious metal. Thus, it cannot be called a currency by definition; instead you would call that an asset.

The precious metals specifically falls into the asset category because:
1) It is a single item of ownership having exchange value.
2) Items of ownership convertible into cash (i.e., precious metals are sold or "converted" in exchange for currency such as USD)

If you have a mortgage, try to pay your bank with those gold coins. You will have to sell them to the bank to be converted to a real USD currency first. If you want to be specific bitcoin is a "virtual" currency. It's not a fiat currency.

Definition of 'Fiat Money/Currency' = "Currency that a government has declared to be legal tender, despite the fact that it has no intrinsic value and is not backed by reserves."
http://www.investopedia.com/terms/f/fiatmoney.asp#ixzz24X6p9SZ1

 

[Chiropteran]

I'm sure than many people will continue to mine if they drop to $2 each, thinking "they will recover." I personally love to hear/read this argument from tree-hugging government haters - they act like bitcoins will continue to rise in value for eternity. It might cost more in electricity to mine them but people will still continue. Um, yeah, you could buy "unlimited" amounts of coins at $2 each, why mine them if it costs you more than $2?

The cost evaluation isn't that simple. It's not like you can instantly shut down mining and instantly sell all your mining hardware at current fair values without a great deal of effort and transaction costs. It's more efficient to mine at a minor loss for a few weeks than it is to sell your hardware at a 15% loss and then buy it back a few weeks later at another 15% loss.

While you may be able to shut down your mining and remove the electricity cost, you still have the depreciation, annoyance, and other hidden costs, these costs INCREASE if you stop mining, rather than decrease. You need to look at the big picture, and it may just make more sense to continue mining at a minor loss rather than shut down and liquidate at an even greater loss.

The math for buying coins directly is also not as simple as you imply. Often when bitcoins crash, they start increasing back up in value hours after the crash. Do you know how long it takes to deposite cash into MTGOX? Well, I don't either, but my understanding is that it takes days, sometimes longer. You can't just buy 1000 bitcoins at $2, at best you can start the process to transfer $2000 into your MTGOX account and by the time you have the money availible BTC may be back up to $8. Playing the market really requires a dedicated cash investment, you need to have the money in your account BEFORE the crash occurs, otherwise it's too late to take advantage. This changes your whole profit formula, because it also opens up the possibility that you let $2000 sit in your MTGOX account for a BTC crash that never happens. That is wasted capital.

 

[Mir96TA]

Normally its faily Cool

When I run the Bit coin.. Temps get little to high
Temps are little too high ?:\

 

[chimaxi83]

Your temps that are "normally cool" are cool because your card is at idle. Your load temps look normal. 99% usage while mining is more stressful than a 99% gaming load, mining temps are higher.

 

[Mir96TA]

Your temps that are "normally cool" are cool because your card is at idle. Your load temps look normal. 99% usage while mining is more stressful than a 99% gaming load, mining temps are higher.

I see; I always thought VRM temps never should cross 70c thhreshold........ or you are slowly burning down the card

 

[Elfear]

Finally got my three 7970s up and running. Still need to play around with final clocks but so far I'm at:

#1 7970 - 1125/685 1.15V (61.3% ASIC) 665mhash
#2 7970 - 1125/685 1.112V (76.5% ASIC) 665mhash
#3 7970 - 1170/685 1.081V (83% ASIC) 697mhash

That's ~2025mhash and the total system power consumption from the wall is 770-780W. Not nearly as efficient as my system with 7970 #3 (280W) but still better than three separate systems running three cards. Total electricity cost should be around $2/day which means I should be able to make $6.60/day in profit at current bitcoin prices. Should have the extra two cards and waterblocks paid off in a little over 4 months.

Probably cutting it close with the new ASICs set to enter the market soon but even if I only get two months out of these cards my total out-of-pocket for Trifire 7970s with full-cover blocks will be $450.

Interesting tidbit, total system draw of 770W is the same as my i7 920@4.2GHz and Xfired 6950s@950/1300 running Stalker: COP. I'll have to run some benchmarks to compare the two systems.

 

[Binky]

Anybody running cgminer with a watchdog app, like akbash? I'm running the cgminer/akbash combo and it seems pretty sweet. It spams the hell out of my email but I always know what's going on.

 

[RussianSensation]

When I run the Bit coin.. Temps get little to high
Temps are little too high ?:\

Mir96TA, what HD7970 card do you have? Your GPU temperatures are decent. 82*C is nothing to worry about. Your VRM temperatures are excellent. My VRMs are 15*C higher than yours on the Sapphire DX.

Finally got my three 7970s up and running. Still need to play around with final clocks but so far I'm at:

#1 7970 - 1125/685 1.15V (61.3% ASIC) 665mhash
#2 7970 - 1125/685 1.112V (76.5% ASIC) 665mhash
#3 7970 - 1170/685 1.081V (83% ASIC) 697mhash

That's ~2025mhash and the total system power consumption from the wall is 770-780W.

Congrats on adding 2 more 7970s to your stable. $450 for all 3 with water-blocks would be a smashing deal. It's interesting how so many people on our forum simply ignored this bitcoin mining perk/feature and instead spent $1000-1500 on GTX670 Tri-SLI / GTX680 SLI / GTX690. This is like getting 3 top-of-the-line cards for the price of 1 and waterblocks

BTW, are your voltage readings from HWInfo64/GPU-Z sensors? Not from MSI Afterburner I am assuming. It looks like many 79xx cards actually undervolt despite setting higher values in MSI Afterburer/Sapphire Trixx. I can't confirm with certainty since that would mean using a multi-meter to check the voltage points on the physical PCB but from what I see a lot of these cards are stable at 1.175V or lower per software readings despite setting 1.2-1.25V+ in MSI Afterburner.

The cost evaluation isn't that simple. It's not like you can instantly shut down mining and instantly sell all your mining hardware at current fair values without a great deal of effort and transaction costs. It's more efficient to mine at a minor loss for a few weeks than it is to sell your hardware at a 15% loss and then buy it back a few weeks later at another 15% loss.

The beauty of mining with GPUs even at the current difficulty is that as long as they make $ after electricity costs, it's still worth mining. The bonus is that the graphics card can be readily resold to the gaming market or you can yourself use it to play videogames and mine on the side. If the bitcoin mining becomes unprofitable, the videocard can be resold or used for actual purposes. A special purpose ASIC that becomes too slow will actually be a worthless piece of equipment. Right now it's too difficult to predict how much the difficulty in mining will rise once the ASICs come online. It could be the case that the 3.5 GH/sec Jalapeno barely makes any $, which would be a total waste of $163 for that unit. It could be that you'd need 5-6 of these units to actually start making decent profits with mining.

Since we have no accurate way to predict how bitcoin mining will be affected after ASIC units enter the market, we can just continue to use the graphics card for now and go with the flow. Worst case scenario you end up with cheaper GPUs or pocket the gains from mining and just dump the GPUs after you are done and re-assess if it actually makes any sense buying the Jalapenos. The counter-argument is that if you pre-order the Jalapenos early enough, you may be able to get in at an early time where the 3.5 GH/sec rate of those units will make a lot of $ in the very beginning easily paying off for the Jalapenos shortly. But for those of us who haven't pre-ordered in June, we are 2 months behind those October 2012 shipments. That means if we were to pre-order the Jalapenos now, we might only get them 1-2 months later after the initial wave hits the open market; and that's why there is a risk imo.

What are people's thoughts on this?
If and when do you guys plan on ordering the ASICs from Butterfly Labs if you haven't pre-ordered them already?

 

[blastingcap]

People didn't ignore it, but BTC crashed to $2 and took forever to crawl back up. At the time of 7970's release for instance it was something like $5 or less and could not even cover electricity costs for some people. So mining was discredited. Sure it's easy to say NOW that you could have been mining back then, but back then people were wondering if the entire thing was gonna collapse.. with hacks and scams all over the news every month and the huge crash, it was easier to imagine BTC failing rather than rebounding.

And so it is now: BTC has had a good run lately and people all of a sudden forget all the past troubles and think the good times will get even better. People are so short-term and short-sighted, thinking difficulty will remain constant or price will remain the same. At current rates difficulty will quadruple by December, then OCTUPLE due to the halving of rewards. (It may even increase faster than this if ASICs do hit in October... it's pretty much game over for most GPU miners at that point). As for prices that is a manipulated market and we have no idea if it will go to $2 or $20.

And yes it's too late (in the sense of earning a substantial return quickly) to order a ASIC if you didn't already order one, as you are way down the waiting list and by the time you get yours, difficulty will probably be much higher than it is now, like 20x difficulty. People don't seem to realize that ASIC is 10-20 times more efficient than GPU mining.

 

[Binky]

People are so short-term and short-sighted, thinking difficulty will remain constant or price will remain the same.

If it takes $2.01 of electricity to mine one bitcoin, and you can buy them on the open market for $2 of less, there is no scenario where it makes sense to run a miner.

Before anybody starts analyzing the actual cost to mine, I'm obviously not giving a real cost. The $2 part is ONLY an example. Pick any number you want.

 

[blastingcap]

If it takes $2.01 of electricity to mine one bitcoin, and you can buy them on the open market for $2 of less, there is no scenario where it makes sense to run a miner.

Before anybody starts analyzing the actual cost to mine, I'm obviously not giving a real cost. The $2 part is ONLY an example. Pick any number you want.

I agree. I would add this: Those people who think higher difficulty will lead to higher prices (which I hope I've disproven by now in my previous posts but apparently some people hopelessly cling to their fantasies anyway), simply buy bitcoins directly. Screw the mining and all the associated heat and setup headaches and cards burning out and depreciation, just buy up a ton of bitcoins.