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One Bitcoin By the Numbers: Is There Still Profit To Be Made?

timothy posted about a year ago | from the nature-of-money dept.

Bitcoin 239

massivepanic writes with an article that "runs through the logistics of mining a Bitcoin on everyday gaming computers while keeping an eye on power consumption, time spent, and return on investment. From the article: 'I have mined a Bitcoin. This was not much of an accomplishment a year or two ago, but in 2013, after the infamous early-April peak at $260, unearthing a Bitcoin is no easy task. Competition is on the rise and we are getting close to the end of the good ol' days of Bitcoin; the time when a desktop computer or two have any real mining capabilities.'"

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Remember the old adage (3, Insightful)

DigiShaman (671371) | about a year ago | (#43592829)

It takes money to make money. The ROI is higher the more you spend.

Re:Remember the old adage (-1)

Anonymous Coward | about a year ago | (#43592927)

I want to slurp your bare asshole while Luigi and friends mercilessly eject their little white tadpole friends directly into my bare Bayer aspirin hole. Afterwards, I might even fart out some cum with a side of feces. What say you?

Re:Remember the old adage (5, Interesting)

femtobyte (710429) | about a year ago | (#43593039)

And remember another old adage: "There's a sucker born every minute." Want to get some ROI? Don't mine bitcoin, sell bitcoin mining rigs. Like selling shovels and booze to miners in a gold rush, it's a great way to make sure you get the cash now, and leave someone else scrabbling in the dirt with all the risk that tomorrow's newer custom FPGA rigs and market prices will make today's mega mining cluster not worth the electricity to switch on.

Re:Remember the old adage (4, Insightful)

omnichad (1198475) | about a year ago | (#43593109)

As long as you know when to get out. Otherwise, you'd be just like the miner - left with a lot of spare equipment of no value. Inventory isn't free.

Re:Remember the old adage (2)

ArcadeMan (2766669) | about a year ago | (#43593211)

Aren't Bitcoin mining rigs regular FPGA rigs configured for that specific task? Reset the hardware/software and you can sell it as regular FPGA to any number of people, it's nothing custom-made for mining Bitcoins.

Re:Remember the old adage (1)

Shark (78448) | about a year ago | (#43593287)

It's hard to make a general-purpose fpga board cost-efficient for bitcoin mining. And with ASIC mining solutions now surfacing, it's also going the way of the GPU, just as that obsoleted the CPU.

Re:Remember the old adage (2)

Intrepid imaginaut (1970940) | about a year ago | (#43593353)

It's hard to make a general-purpose fpga board cost-efficient for bitcoin mining.

Possibly you missed the adage: "There's a sucker born every minute."

Re:Remember the old adage (1)

joocemann (1273720) | about a year ago | (#43593073)

But bitcoin is extremely wasteful. At least with real coins the metals are still useful.

Re:Remember the old adage (5, Funny)

Anonymous Coward | about a year ago | (#43593477)

But bitcoin is extremely wasteful. At least with real coins the metals are still useful.

Bitcoin bits are infinity reusable. You could reuse those bits to make a picture, song, movie, spreadsheet, game, encryption key, etc.

Re:Remember the old adage (0)

Anonymous Coward | about a year ago | (#43593547)

Bitcoin bits are infinity reusable. You could reuse those bits to make a picture, song, movie, spreadsheet, game, encryption key, etc.

Those sound far more useful! In fact, why am I wasting my time converting them into Bitcoins in the first place?

US Currency on soft rolls of paper (2)

Dareth (47614) | about a year ago | (#43593611)

I imagine US currency coming in nice $100 "soft rolls of paper". Least that way you know your money is always worth a ... well you get the picture.

Re:US Currency on soft rolls of paper (0)

Anonymous Coward | about a year ago | (#43593739)

I imagine US currency coming in nice $100 "soft rolls of paper". Least that way you know your money is always worth a ... well you get the picture.

It's become popular to say this, and that the government is printing money (duh), but I'd like to hear specifically what is it you actually mean by saying this? It seems people are hinting towards something problematic, but what is the actual (non-theoretical) problem you experience with the fairly stable modern currency systems everyday (years/decades)?

Re:Remember the old adage (4, Funny)

BasilBrush (643681) | about a year ago | (#43593131)

A bitcoin may cost more in electricity than the bitcoin is worth, but hell we can make up for it with volume!

Re:Remember the old adage (3, Insightful)

Anonymous Coward | about a year ago | (#43593745)

In college dorms, electricity is "free".

Re:Remember the old adage (1)

alexander_686 (957440) | about a year ago | (#43593585)

Probably not – or at least not for long. ROI is a ratio, Return Over Investment - or the percent return on your investment regardless of what the exact amount of the investment is. It allows somebody to compare a small project vs. a big project.

Your ROI would get greater as long as you have economies of scale – that is, the more money you spend the more efficient of a computer setup you get. I am going to make the assumption that pretty quickly you are going to hit the economies of scale (I don’t know a lot about BitCoin rigs, so I could be wrong.) – So, after you have purchased the most efficient BitCoin miner, the next BitCoin miner you buy will have the same ROI as the first - no more increase.

But why? (-1)

Anonymous Coward | about a year ago | (#43592835)

With Silk Road down, it's not as if I can use fake money for drugs. I can only use it for ripping off autistic basement-dwellers and that doesn't seem sporting.

Re:But why? (1)

lister king of smeg (2481612) | about a year ago | (#43593137)

i think it is still there also there are a lot more places to use bit coins just go look through the hidden wiki some time oh and you can order pizza with them

Re:But why? (1)

lgw (121541) | about a year ago | (#43593627)

What happened to Silk Road? I would have expected bitcoin to crash hard without the black market to spend them on, but I don't really follow either closely.

other ways (2)

deodiaus2 (980169) | about a year ago | (#43592865)

I wonder if at this point it makes more sense to push an alternative, E-coins. I better go out and push it!! Maybe just as a contingency in case Bitcoins have technical issues.

Re:other ways (1)

Anonymous Coward | about a year ago | (#43592881)

Yes, and once your e-coin economy crashes you can roll out the new f-coin hotness and ride the wave to profit and victory!

Re:other ways (2)

ArcadeMan (2766669) | about a year ago | (#43593223)

Plenty of letters left in the alphabet - Captain Jean-Luc Picard

Re:other ways (1)

ganjadude (952775) | about a year ago | (#43593877)

no no no...everyone knows it is E-coins THEN iCoins! At least if we go by the 90s E prefix into the 2000 I prefix

Re:other ways (0)

Anonymous Coward | about a year ago | (#43593011)

A bunch of alt-coins are already out there, though mostly developed by the same community. Namecoin, Lightcoin, PPCoin (peer-to-peer) coin. The latter may have value given that after the initial period, it will generate coins based on proof-of-stake (possession of coins) rather than proof-of-work (energy intensive number crunching), with an ecological benefit.

That value remains to be seen, and just because it's better doesn't mean it will take off.

Disclaimer: I own a modest number of these for interests' sake and in case one of them pops.

Re:other ways (1)

Joce640k (829181) | about a year ago | (#43593243)

A bunch of alt-coins are already out there

This is precisely what makes Bitcoin worthless.

As soon as mining becomes too difficult, all the miners/speculators will shift to the Next Big Thing (all hoping to get in at the top level).

The miners/speculators are what gives Bitcoin its value. That value will come crashing down when they leave.

Re:other ways (0)

Anonymous Coward | about a year ago | (#43593925)

Bitcoins are not a store of value, nor are the alternative digital currencies. What you're investing in is "secure transaction futures."

Think of it this way: if you're going to be doing a lot of encrypted messaging, it's a good idea to have a stash of one-time pads.

Re:other ways (1)

r2kordmaa (1163933) | about a year ago | (#43593029)

Yeah, only that all current alternative e-coins are pretty much copy-paste-modify-conf versions of bitcoin so if there are any serious technical issues with bitcoin(none found so far) they will affect others just the same. Bitcoin is the first technology to make money transfer without trusted third party possible and will possibly remain an only one for a long time.

Re:other ways (2)

betterunixthanunix (980855) | about a year ago | (#43593589)

Bitcoin is the first technology to make money transfer without trusted third party possible and will possibly remain an only one for a long time.

Really? Back in my day, we used this technology:

https://en.wikipedia.org/wiki/Paper_money [wikipedia.org]

Re:other ways (2, Insightful)

Anonymous Coward | about a year ago | (#43593903)

Involves a trusted third party. The one who prints the money.

Another bitcoin article? (-1)

Anonymous Coward | about a year ago | (#43592869)

The pyramid scheme never ends...

Re:Another bitcoin article? (3, Insightful)

Anonymous Coward | about a year ago | (#43592995)

The pyramid scheme never ends...

That's because Bitcoin is not a pyramid scheme. You have completely misunderstood the meaning of one or both of these, to make a comment like that.

Re:Another bitcoin article? (1, Troll)

kaizendojo (956951) | about a year ago | (#43593055)

A pyramid scheme is a non-sustainable business model that involves promising participants payment or services, primarily for enrolling other people into the scheme, rather than supplying any real investment or sale of products or services to the public.

If the shoe fits....

Re:Another bitcoin article? (1)

Anonymous Coward | about a year ago | (#43593085)

The shoe doesn't fit. Bitcoin doesn't promise payment or reward enrolling other people.

Re:Another bitcoin article? (0)

Anonymous Coward | about a year ago | (#43593177)

Also, it isn't a business model.

Re:Another bitcoin article? (1)

gandhi_2 (1108023) | about a year ago | (#43593391)

It works great here in Utah where each 2 people have 6+ kids.

Which, come to think of it, might be why pyramid sch....er sorry, MLM is so popular in Utah.

Re:Another bitcoin article? (1)

Artifakt (700173) | about a year ago | (#43593457)

The audio recording industry has a non-sustainable business model, and they now claim customers are not buying a real product or service but simply acquiring a licence. Sounds like they are about two thirds of the way to being a pyramid scheme. They aren't promising any payment for enrolling others, at least yet. You could argue that pushers offer pyramid schemes, discounting drugs to get new 'members' to enroll as junkies, yet pushing heroin doesn't quite fit the pyramid scheme definition. Maybe what we need to focus on here is that it may take several forms of bad behavior to add up to a pyramid scheme, but having only some percentage of those features does not make something sound business, ethical, or often even legal.

Re:Another bitcoin article? (1)

Anonymous Coward | about a year ago | (#43593945)

The audio recording industry has a non-sustainable business model, and they now claim customers are not buying a real product or service but simply acquiring a licence. Sounds like they are about two thirds of the way to being a pyramid scheme. They aren't promising any payment for enrolling others, at least yet. You could argue that pushers offer pyramid schemes, discounting drugs to get new 'members' to enroll as junkies, yet pushing heroin doesn't quite fit the pyramid scheme definition. Maybe what we need to focus on here is that it may take several forms of bad behavior to add up to a pyramid scheme, but having only some percentage of those features does not make something sound business, ethical, or often even legal.

The audio recording industry most definitely have a sustainable business model that is in the process of being adopted, the growth of iTunes, Spotify and growing importance of concert revenue have proven that. They have been, and still are, kicking and screaming because of having to do cost-adjustments in their model, but that is very different. I lot of industries have gone through that, including computers.

And you do need to read up on what a pyramid scheme really is, it is a very specific thing and not a collection of bad behaviors. It is also not really applicable to Bitcoin.

Re:Another bitcoin article? (-1, Troll)

Kenja (541830) | about a year ago | (#43593071)

True, it's more like a ponzi scheme where the last people to buy in get stuck with the inevitable losses.

Re:Another bitcoin article? (0, Troll)

Joce640k (829181) | about a year ago | (#43593133)

A founder at the top making a mint, some early adopters below him doing well, lots and lots of people at the bottom struggling to break even...

It sure sounds like a pyramid scheme to me.

Re:Another bitcoin article? (4, Interesting)

Animats (122034) | about a year ago | (#43593207)

A founder at the top making a mint...

Analysis of the block chain indicates that somewhere around 5 million early Bitcoins have never been traded. Those were generated when the difficulty was so low that ordinary CPUs could generate thousands of Bitcoins. Some of them were probably lost by people running the software in the early days and not keeping the results, but there's a reasonable chance that, somewhere, the anonymous people behind this have a few million Bitcoins stored up. Someday they may cash out.

Re:Another bitcoin article? (3, Interesting)

Anonymous Coward | about a year ago | (#43593307)

I just read from an investment newsletter that the Winklevoss Twins have a ton of bitcoins on flash drives locked up in safety desposit boxes.

Re:Another bitcoin article? (0)

Anonymous Coward | about a year ago | (#43593731)

Don't flash drives go bad reasonably quickly? I hope they have tons of copies on more flash drives.

Re:Another bitcoin article? (0)

Anonymous Coward | about a year ago | (#43593479)

BitCoin is a great thing:

1: The original people and the founder got their coins when a CPU could easily do the task, instead of FPGA arrays, or even dedicated ASICs.

2: It isn't anonymous, so people who think they can extort will be hunted down by FinCEN, the IRS, or if not in the US, Interpol. Had they used a Chaumian currency, anonymity would be a non-issue.

3: It is another money making avenue for bot-herders, now that ID theft and spamming is a dry hole.

4: It has so much volatility, that unless you were an early adopter, you have to move your value in and out of the currency as fast as possible.

All and all, with no way for it to be anonymous... I'll just use PayPal instead. Lot easier, and less chance of the IRS demanding inquiries.

Re:Another bitcoin article? (0)

Anonymous Coward | about a year ago | (#43593189)

That is correct, it is a pump and dump

Re:Another bitcoin article? (1)

ArcadeMan (2766669) | about a year ago | (#43593235)

Pyramid, cube, sphere, whatever. You got something against Egyptians, you insensitive clod?

bitcoin (-1, Flamebait)

Reverand Dave (1959652) | about a year ago | (#43592875)

Blah blah blah Bitcoin. Let the flame war commence.

Not at this point (0)

Anonymous Coward | about a year ago | (#43592913)

For most people, no not at this point. The computing power in the network at this point is immense, it makes the fastest super computers look like pocket calculators, so without a costly and lengthy investment you won't see anything but pennies in return.

Of course it all scales with the price of Bitcoin, which fluctuates heavily, so this could change from one month to the next.

Bitcoin is dead... (4, Funny)

magic maverick (2615475) | about a year ago | (#43592937)

Bitcoin is a scam, and is never going to go anywhere. After all, you can't pay your taxes with it.
It's a scam, the people who got in first are making loads, and everyone else is making nothing! Just like a pyramid scheme.

And it's not worth mining, because of ASICs etc.

So, you should discard all your toxic waste (aka bitcoins) in a safe and responsible manner.

Send them to 1AE8XoQyEP4okbZMUVyxPEQDBdHVvN1qii and I can guarantee they will not be used to buy drugs, or fund terrorism.

Re:Bitcoin is dead... (0)

Joce640k (829181) | about a year ago | (#43593155)

Bitcoin is a scam, and is never going to go anywhere. After all, you can't pay your taxes with it.

Last I heard, the tax office doesn't accept chickens, goats, cows, flint axes, clam shells... or any number of things that were once used as money.

Re:Bitcoin is dead... (1)

i.r.id10t (595143) | about a year ago | (#43593225)

Heh. I'm reading a spot of fiction/fantasy where a massive economic collapse has happened, and the Government is worrying about taxing all the barter/trade going on. Cell minutes become a currency in a heartbeat. When talking about taxing individuals, one Smart Person mentions "how do you compute 10% of a chicken? Do we just mail them 10% of it when we butcher it for dinner? The IRS is gonna be getting a lot of packages full of rotting chicken guts...."

Re:Bitcoin is dead... (0)

Anonymous Coward | about a year ago | (#43593663)

And therein lies the problem with taxation of bartering. The government has no business taxing barter transactions.

Taxation is forgiveness of government debt by those that use its services. That's why the government is only open to payment in the debt notes issued by them. If you send them a chicken, they have little use for it, and they're still stuck with outstanding debt notes.

So why are they counting chicken-trade against your tax bill? Because they can. Right up until there's no more blood in the stone, so to speak. When you're out of debt notes, there's really nothing else they can do to get them from you. So they throw you in debtor's prison for refusing to play their game. Now YOU'RE in debt-note-debt to them. When a government falls that far, it's time for someone to take it out behind the woodshed and send it to the place with all the rabbits. And chickens.

Re:Bitcoin is dead... (0)

Anonymous Coward | about a year ago | (#43593633)

Why do you think they're no longer used as money?

Re:Bitcoin is dead... (1)

BasilBrush (643681) | about a year ago | (#43593165)

After all, you can't pay your taxes with it.

But you can buy tulip bulbs and Beanie Babies!

Re:Bitcoin is dead... (1)

Anon-Admin (443764) | about a year ago | (#43593361)

You can buy gold with it, then sell the gold and pay your taxes on the profit.

So you can pay taxes with and on bitcoin, you just have to buy and sell the right items.

Here's a tip (2)

Sycraft-fu (314770) | about a year ago | (#43593199)

Nothing you post on a web forum is worth any money.

Re:Bitcoin is dead... (2)

ArcadeMan (2766669) | about a year ago | (#43593267)

Please help! My friend is a Prince and he needs to hide a lot of money quickly! We were planning on using your Bitcoin account, but I tried www.1AE8XoQyEP4okbZMUVyxPEQDBdHVvN1qii.com and it didn't work! Something about HOSTS FILES NOT FOUND or some other crap. I also got an APK ERROR on top of that!

Deflation, numbnuts (-1)

i kan reed (749298) | about a year ago | (#43592951)

Look, I think Bitcoins are a mentally deficient concept appealing only to fiat currency haters who don't really understand their own arguments, but even I have to acknowledge that this was part of the design of the system. It would get more expensive to mine, and people would stop mining due to lack of profit, and eventually scarcity would drive the price up again to allow more mining.

Complaining about it now just reflects badly on you.

Re:Deflation, numbnuts (0)

Joce640k (829181) | about a year ago | (#43593181)

Scarcity doesn't necessarily drive prices up.

Gullibility, OTOH...

Re:Deflation, numbnuts (5, Insightful)

eln (21727) | about a year ago | (#43593325)

I agree that bitcoin is built to be scarce, and therefore valuable, but that sort of thing is the opposite of what you want in a currency. If the currency constantly increases in value, then the best option is to obtain as much as possible and stuff it under the mattress. Only an inflationary currency encourages investment, because you actually lose money by hoarding it rather than investing it. If everyone hoards the stuff instead of spending it, it becomes useless as a medium of exchange.

Re:Deflation, numbnuts (0)

Anonymous Coward | about a year ago | (#43593649)

Not to mention the whole stupid concept of "we need to waste $X worth on electricity to have ~$X worth of currency"... It's like spending valuable resources to mine gold only to have the bank lock it up forever in an underground vault---yes, smart that :-/

Re:Deflation, numbnuts (2)

lgw (121541) | about a year ago | (#43593695)

There's a related problem here I think people are overlooking. Part of the appeal of bitcoin is it's decentralized nature - a government can't easily stop transfer of bitcoins between individuals. However, since mining is transaction processing, if it becomes only profitable to do transaction processing in the 3 biggest miner's datacenters, we're back to centralization and therefore easy government control.

Four ways to profit (5, Insightful)

onyxruby (118189) | about a year ago | (#43592957)

You can profit from bitcoin in four different ways:

1. Have a special asic rig that is custom made for mining bitcoins.
2. Have a botnet that you put to work mining bitcoins using other peoples electricity.
3. Speculate in bitcoins and bet that they will go up or down in value.
4. Hack someone else that has bitcoins.

Two out of the four ways to make profits with bitcoins are illegal and one of the others is often accompanied by illegal activity (DOS) to manipulate the exchanges to try to force the value up or down. It's been a while since you could mine them on your own and come out ahead on electricity versus bitcoin value. Perhaps there are some good reasons bitcoins have a shady reputation?

Re:Four ways to profit (1)

Anonymous Coward | about a year ago | (#43593057)

You forgot the most profitable way to make money with bitcoind
5. Sell things (for real money) that can be used to make bitcoins

Re:Four ways to profit (1)

crevistontj (1032976) | about a year ago | (#43593135)

Is there really any practical way to short bitcoins?

Re:Four ways to profit (0)

Anonymous Coward | about a year ago | (#43593351)

Yeah, don't buy them and invest in things of actual value.

Re:Four ways to profit (0)

Anonymous Coward | about a year ago | (#43593377)

>Is there really any practical way to short bitcoins?

I don't think so.

That's why the price is so vulnerable to sudden collapses.

Re:Four ways to profit (1)

leonardluen (211265) | about a year ago | (#43593671)

same way you would short stock. you have to borrow it from someone with the promise of returning their bitcoins later (probably with some interest), and then you sell them to someone else.

Re:Four ways to profit (1)

femtobyte (710429) | about a year ago | (#43593873)

The difference in "practicality" is all the government regulation and lack-of-anonymity in stock shorting transactions. All the "benefits" of bitcoin make it a really dumb idea to say "hey, I'll send $10000 to pseudonymous internet guy #9cdn89274nkdw0, for a promise to sell me back bitcoins later." If you expect to buy "promises" from people, you need a lot of complex safeguards to make sure they don't just vanish away as soon as they have the money --- the opposite of what the Bitcoin system is set up to achieve.

Re:Four ways to profit (2, Insightful)

Nrrqshrr (1879148) | about a year ago | (#43593153)

Not really a defender of Bitcoins, but:
You can get real money in four different ways:

1. Have a special skill or qualification that allows you to acquire money.
2. Put others to work earning you money for a profitable wage using other peoples special skills or qualifications.
3. Speculate, lol.
4. Steal.

Only one of these is ethical.

Re:Four ways to profit (1)

Anonymous Coward | about a year ago | (#43593311)

Speculation is not unethical.

Re:Four ways to profit (1)

dkf (304284) | about a year ago | (#43593411)

Speculation is not necessarily unethical.

FTFY.

Re:Four ways to profit (0)

Anonymous Coward | about a year ago | (#43593591)

Hard work and brains are also not necessarily unethical.

Re:Four ways to profit (1)

egcagrac0 (1410377) | about a year ago | (#43593519)

Only one of these is ethical.

I disagree with that. If #1 is ethical, #2 is also ethical, by extension. (If it's ethical to work, why wouldn't it be ethical to employ?)

#3 - speculation - is dubious. In its pure form, it's arbitrage with risk involved.

If you meant to say "Only one of these is unethical", then I apologize for misunderstanding.

Re:Four ways to profit (1)

femtobyte (710429) | about a year ago | (#43593657)

And why does #2 follow from #1? This might be Capitalist dogma, but it's not a universal moral law. Many people do distinguish the category of "enjoy the fruits of your own labor" from "interpose yourself between someone else' willingness and ability to labor (by, e.g., owning the tools and resources), and collect a big cut of the fruits of their labor just because you are already rich (and they are poor, since they can only keep a tiny fraction of their labor's value for themselves)."

Re:Four ways to profit (1)

egcagrac0 (1410377) | about a year ago | (#43593819)

If it is ethical to work for others, it is ethical to employ others.

Suppose I need work done, within your skill set. I can pay you to do the work, yes?

Suppose I need work done, but I don't know who has the skills. I can pay an agent to find me a skilled worker, yes? (That agent's skill is finding me someone to perform the needed work.)

Re:Four ways to profit (1)

girlintraining (1395911) | about a year ago | (#43593573)

Only one of these is ethical.

I'm guessing you meant theft. If you're starving to death, stealing a loaf of bread is something few people would say is unethical. As for the other three... well, they all involve money, and as we know, money is the root of all evil.

Re:Four ways to profit (1)

Dr. Sheldon Cooper (2726841) | about a year ago | (#43593937)

The LOVE of money is the root of all evil.

There is nothing wrong with money, nor with having lots of it. It is when one begins to value money over all other things that one begins to fall.

Re:Four ways to profit (1)

moeinvt (851793) | about a year ago | (#43593701)

You're arguing that in a transaction where one person agrees to use their special skills or qualifications in exchange for another person giving them an agreed upon amount of "money", one of the two parties has done something unethical?

I see nothing unethical about speculation either.

Re:Four ways to profit (0)

girlintraining (1395911) | about a year ago | (#43593167)

1. Have a special asic rig that is custom made for mining bitcoins.

A technology unavailable to the average person, thus effectively ensuring that this fiat currency is only produced by corporations. In other words, those who control the ASICs will be the OPEC of the digital currency world.

2. Have a botnet that you put to work mining bitcoins using other peoples electricity.

Which, legalities aside, will quickly make the production of bitcoins more expensive than any currency ever developed; And it's designed to continue to use resources up like a cancer. The Native Americans once said "Only after the white man has killed every buffalo, and cut down every tree. Only then, will the white man learn he cannot eat money." They probably didn't realize at the time that the siren call of 'digital' currency would result in the creation of a cancerous monetary system that attaches itself directly to the nervous system of society: Our energy grid.

3. Speculate in bitcoins and bet that they will go up or down in value.

We've already seen where speculation leads: Every major economic collapse has been based on investing on the guesswork of what other people will invest in... instead of investing in actual goods and services. Every. Last. One. Bitcoin will not be the thing that changes the historical record.

4. Hack someone else that has bitcoins.

Already quite popular, but this at least is something that can realistically be solved... through more corporate control. Yup, you heard me: By centralizing the "decentralized" currency, you can provide effective security. Which defeats the main reason why bitcoins were created in the first place: Anonymity.

So what I see is basically the next Paypal of the internet, except instead of having one corporation fucking us all over, we'll have dozens. And once the corporations are in control, then the governments will move in to attach strings and turn them into marionettes. And after that... it becomes a political power struggle to control the new de facto currency of the internet.

And we all know how well government control of the internet has been working out for us so far... now we're going to marry a cancerous monetary system that depends on exponentially increasing our energy consumption to government oversight, corporate profiteering, and then blobbing our global communications infrastructure and global economies together.

Operation This Will Most Likely End Badly is a go.

Re:Four ways to profit (1)

swb (14022) | about a year ago | (#43593553)

Could you modify #2 in a way that uses cheaper electricity?

Say wind/solar/micro-scale hydroelectric?

Obviously if you have to build the power infrastructure from scratch, it's not worth it, but what if for some reason you had access to equipment that wasn't being used and you can generate a couple of kW for free?

If electricity is really the major input cost (and not computing infrastructure), then a variation of #2 could involve stealing electricity but using your own computer equipment.

I can almost see it now -- the feds busting the equivalent of a marijuana grow house where the interior has been stripped and stuffed full of PCs with power being stolen from the utility by bypassing the electric meter.

Re:Four ways to profit (1)

Agent ME (1411269) | about a year ago | (#43593863)

It's been a while since you could mine them on your own and come out ahead on electricity versus bitcoin value.

The reason mining does lower returns now is because more people are mining now. I imagine many of them are driven by profits and are smart enough to only mine if they have a machine that mines more bitcoins than what they spend on electricity. Your post reads like the joke "No one goes to that club any more, it's too crowded!".

FPGA - making money without effort - or not ! (1)

burni2 (1643061) | about a year ago | (#43593005)

get an eval board with a decent rating (~1024$) learn (V)HDL

btw.
making money without effort is a very bad turn, or good in another sense, because when you look at the financial crisis, this is the way it happend
speculation and greed.

And to put it into perspective even if you aren't aware you are greedy and greed is the most potent danger to wealth. If you produce worth out of nothing there is a stabilization line and if you cross that and everybody does this you cannot quench money out of the thin air.

So don't whine and go to work!

Re:FPGA - making money without effort - or not ! (0)

Anonymous Coward | about a year ago | (#43593187)

The ASICS, even currently, make FPGA look silly: https://en.bitcoin.it/wiki/Mining_hardware_comparison

There are alternative alternatives. (2, Interesting)

Anonymous Coward | about a year ago | (#43593009)

More crypto-based currencies are coming around, Litecoin being the apparent "next big thing" I have been hearing.

Me and a friend were going to get in on it to see if it would at least maybe get a few quid or so, not expecting huge returns, just a little bit of profit.
But eh, I'm too lazy to leave a program running on its own.
I may try it out, but it is getting in to figuring out exchanges, knowing when to sell, etc.
I have a hectic life as is. Watching my investments is something I already don't do, probably stupidly on my part.

Litecoins seem to be aiming at a more general lower priced currency for cheaper purchases because it is easier to do initial mining even on fairly old machines.

So what does this say in general?
There is likely going to be a boom in crypto-currencies in the coming decades.
It might even end up leading to more virtual currencies in this century than there has been in the past all of human history, in fact.
As more begin to dry up and stabilize, people will jump to new systems, or even make new systems, in attempt to get money.
I could see a scenario where the creator of a currency gives their friends and family X coins before even going public, then when it gets remotely big, sell it.
Someone smart enough could probably make a killing, and it will likely happen sooner rather than later since it is early days.

Governments should probably get in on this and potentially make lots of money too.
As these systems grow, it is going to get harder with time in general.
If you thought the stock markets were crazy, this would be 100 times worse, it would move so much quicker because the only thing backing it is literally number count and word of mouth.

Re:There are alternative alternatives. (2)

magic maverick (2615475) | about a year ago | (#43593331)

I personally don't think that Bitcoin is a scam. I think it has great potential. But the myriad of other "digital currencies" popping up, I suspect most, if not all, are scams. Seriously, someone went and started a new chain, presumably hoping to do some mining, and then cash out.

With Bitcoins, you can buy various things, but what can you buy with "Litecoin"? Bitcoins? Bitcoins are established (though still niche) and can be used to purchase various services and products (though often via a middleman purchasing the product for you from a company like Amazon, and then sending it on). Litecoin can be used to purchase...

Smells like a right scam to me. Though I'll happily be wrong, I'd advice anyone and everyone to avoid all alternative chains until they have verified that the particular chain can be used for what they want (whether that be buy drugs, or webhosting).

Same as the old boss... (2)

taiwanjohn (103839) | about a year ago | (#43593043)

So now Bitcoin becomes the province of "big iron" players like the gubmint and TBTF banksters. Great.

For those to lazy to click the link.... (2)

MasseKid (1294554) | about a year ago | (#43593045)

Some guy mined a bit coin using the computers he had lying around not in use. It took him 15 days with 2 machines w/ AMD graphic cards. He spent 5 hours setting it up and 24$ of electricity to mint a single coin.

Re:For those to lazy to click the link.... (4, Interesting)

egcagrac0 (1410377) | about a year ago | (#43593647)

While that doesn't sound great, the 5 hours setting it up is one-time fixed overhead.

Let's assume he can sell coins for at least $125... and the rate of generation stays about the same.

That's $50 a week. If you saw $50 on the sidewalk, would you bend over to pick it up?

Betteridge says: (1)

OhSoLaMeow (2536022) | about a year ago | (#43593103)

No.

Re:Betteridge says: (1)

Dogtanian (588974) | about a year ago | (#43593555)

No.

Bzzt! Sorry, you lose; that's not what Betteridge is about. [slashdot.org]

The headline here *is* an actual, legitimate question (whether sensible or not) and not just an excuse to weasel through a poorly-supported assertion in the guise of a fake "question".

Hopeless without a FPGA (4, Informative)

Animats (122034) | about a year ago | (#43593157)

Bitcoins earned: 1.00
Value today: $133.58
Total time: 14.5 days
Rigs operating: 2-3

Towards the end of the run I was getting impatient and ExtremeTechâ(TM)s Joel Hruska helped me sprint to the finish by giving me access to some of his machines...

The era of Bitcoin mining with off-the-shelf hardware is over. The serious people are already using FPGAs, and if the people advertising ASIC hardware [butterflylabs.com] actually ship working product in quantity, even that will be obsolete. Like most Bitcoin-related businesses, the people selling ASIC mining hardware are flakes [bitcointalk.org] .

Bitcoin mining becomes exponentially harder as the 21 million Bitcoin limit is approached. Over 11 million Bitcoins have already been found, so this is already more than half over. All miners are in competition. The rate of Bitcoin discovery is fixed, so the more people mining, the less each miner makes.

Re:Hopeless without a FPGA (1)

hodet (620484) | about a year ago | (#43593253)

Ya and the next 10 million will not be completely mined until 2140. I bet there are a couple of million that are lost for good when they were worth nothing.

Re:Hopeless without a FPGA (0)

Anonymous Coward | about a year ago | (#43593841)

Ya and the next 10 million will not be completely mined until 2140. I bet there are a couple of million that are lost for good when they were worth nothing.

As someone else noted, about 5 million of the earliest mined have never been traded, someone is sitting on a fortune at the top. Early in is always the trick.

Heat your home by mining (0)

Anonymous Coward | about a year ago | (#43593241)

If the weather is cold, then the "waste" energy from mining BitCoins is actually useful and will decrease the costs involved in other heating methods.

Re:Heat your home by mining (2, Informative)

femtobyte (710429) | about a year ago | (#43593337)

Not compared to heat pump systems, that can often provide a lot more warming per watt than dumb direct heat generation methods. From Wikipedia on heat pumps [wikipedia.org] :

When used for heating a building on a mild day, for example 10 C, a typical air-source heat pump (ASHP) has a COP of 3 to 4, whereas an electrical resistance heater has a COP of 1.0. That is, one joule of electrical energy will cause a resistance heater to produce only one joule of useful heat, while under ideal conditions, one joule of electrical energy can cause a heat pump to move much more than one joule of heat from a cooler place to a warmer place.

On the other hand, ground-source heat pumps (GSHP) benefit from the moderated temperature underground, as the ground acts naturally as a store of thermal energy.[4] Their year-round COP is therefore normally in the range of 2.5 to 5.0.

Burning energy for 1:1 return on heat (+bitcoins) is still a terribly inefficient use of energy.

Told you so.... (1)

Jawnn (445279) | about a year ago | (#43593603)

FTFA...

Competition is on the rise and we are getting close to the end of the good ol' days of Bitcoin; the time when a desktop computer or two have any real mining capabilities.

So it really is a pyramid scheme, of sorts.

Finally (0)

Anonymous Coward | about a year ago | (#43593615)

A use for this [wikipedia.org] .

And that is the problem with bitcoin (3, Insightful)

Anonymous Coward | about a year ago | (#43593621)

That miners want to make a profit, a fat one if possible. It would be like the US mint being a for profit organization. It isn't. Even republicans can see why not and that is saying something.

Bitcoin mining was NOT meant as a profit generation scheme but as a way to keep the coins in relative limited supply, to avoid the "tree leaves for currency requiring the burning down of all the forests to control inflation" problem. Bitcoin was originally meant as a barter currency, where you kept the barter. You provided something to somebody for bitcoins and in turn you use them to barter for something else. The idea was to create an altnernate barter market seperate from established currencies. To however create a "secure" currency, where somebody couldn't just print a lot of fake bills, both the mining and transaction require serious computation. In order to get volunteers to do this, a small amount of bits coins are set aside as a reward for handling transactions and miners get the bitcoins they intoduce into the pool to barter with.

BUT the original idea was that the mining would be a tiny amount compared to the flow of bitcoins. A bitcoin was supposed to be traded thousands of time before a new one was generated.

But as always, greed took over. Mining bitcoins was being seen as the ability to mint money and so people did it. Bitcoins became about speculation, who could mine them the fastest, hoard the most and then exchange them for something with real value. The MORE people shout about how many dollars bitcoins are "worth" the more bitcoins loose their value as a barter currency. People don't seek to make a profit from trade through a new way to exchange currency but by speculating in the currency itself. It resembles the gold market a lot. Not the real one, the gold market that has vending machines with tiny gold bars inside, the kinda people that believe that if they got a tiny fortune in gold, when the apocalypse comes, they will be rich because EVERYONE will be wanting gold then... nothing like dealing the end of civiliation then a gold bar.

Bitcoins as a paypal alternative for small traders makes some sense, keep some"value" in bitcoins as a user who sometimes buys and sometimes sells, avoid the traditional exchange fees. But for this to happen, the currency needs to be stable. It isn't and traders are either seeking to get bitcoins "cheap" and sell them high or just doing it as a novelty to create some press.

Google for places that accept bitcoins. The trade is simply non-existent. Places that reached the news have stopped accepting them and the remaining online shops are the ones you would normally stay a million miles away from. Shady doesn't even begin to describe them.

It was a nice idea but human greed and the lack of any counter measures have doomed it from the start.

1FuckBTCqwBQexxs9jiuWTiZeoKfSo9Vyi (2)

nweaver (113078) | about a year ago | (#43593643)

Yes, send your unwanted bitcoins here: 1FuckBTCqwBQexxs9jiuWTiZeoKfSo9Vyi

Overall, a general problem with BitCoin mining is that it is a classic "Red Queen's Race" [wikipedia.org] . The fixed rate of bitcoin addition means you can only get ahead at the cost of someone else. Which means, IF bitcoin succeeded, mining is effectively non-profit as the rather low barrier to entry (even ASIC rigs are only $2K) and no monopoly power means that the profit from mining gets, well, stripped out.

So a totally stupid question (0)

Anonymous Coward | about a year ago | (#43593939)

.. what exactly is bitcoin mining??? I understand its virtual currency thats bought and sold.. is mining them somehow obtaining them for free (other than the logisitics cost outlined in the article)???

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