Which makes more money: mining Bitcoins or writing about mining Bitcoins?

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30 Responses to “Which makes more money: mining Bitcoins or writing about mining Bitcoins?”

  1. A Moses says:

    CPU mining is horrendous at current difficulty’s. Even GPU’s are close to break even point, for bitcoin really you need an FPGA or ASIC device

    • scatterfingers says:

      ASIC devices hitting the market right now are going to absolutely destroy GPU mining, as the difficulty of the network is going to increase with the amount of dedicated hardware coming online.

      The days where an average joe could make a decent amount of money bitcoin mining with OTS hardware are long over.

      It’s quite analogous to a gold rush, actually.

  2. MrBillWest says:

    This reminds me of the old-timey gold rush. A few initial miners got rich. But most miners made almost nothing. The people who really made it big were those supplying materials and supplies.

    • Florian Bösch says:

      Mining is the activity of performing a proof of work, finding a block, crediting yourself with the found reward, attach the pending transactions to the block, credit yourself with the transaction fees of the transactions you attach, and keep the networks bitcoin transactions chugging along for the good of everybody. There’s a system to this madness, you’ll just have to look a bit more closely.

  3. Boris Bartlog says:

    I’ve seen an analysis that suggests that the additional power consumed by a CPU mining bitcoins (versus one that’s idling) will cost you more than the bitcoins are worth. So he probably didn’t even make any money mining them.

    • McGreens says:

      Yeah, I was thinking that. Many CPUs will throttle back when idle so presumably this mining operation would keep them at full whack, thus increasing power consumption.

  4. semiotix says:

    How much money did BB get for writing about writing about mining bitcoins? I know that’s probably not something you’ll share, but that number exists and is probably greater than $40.

    And if it is more than what this guy got for writing about mining bitcoins then we could really be onto something here. I’ll take my royalties for writing this comment about writing this BB post about writing that article about mining bitcoins in cash though, please. 

  5. James Penrose says:

    Reminds me of a scene in “Hitchhiker” where the survivors are using leaves off trees as currency and inflation is so bad it takes a major deciduous forest to buy a packet of peanuts.

    I imagine he used more than 4 cents worth of power in that same period so I don;’t see the point in even trying to make “bitcoins”.

    • Warren_Terra says:

      I was listening to it last night. It wasn’t a major forest, I think (I think it was a small one), but then it wasn’t a pack, either: it was a single ship’s peanut.

      But they had a solution: forest fires.

    • Florian Bösch says:

      Well, put simply, if you can get hold of one of the fabled ASICS machines, that can do around 60gh/s, right now, you could mine about 100 coins per month, which at current prices is just about $10’000/month. Of course they’re selling these machines for obscene prices going for around $8000. Problem is, by the time you get one (if you ever do) conditions will look less favorable.

      • JimboToronto says:

         My BFL ASIC miner was ordered in February, almost half a year after
        they first started taking orders. At current difficulty it would pay me
        about $1000 per week.

        I expect that by the time I get mine, there will be so many already shipped that I could probably expect only one tenth of that return.

        Still, $100 per week profit from a $650 investment is not too bad.

  6. HarveyBoing says:

    Others have already commented on the “cost of electricity” aspect (which is probably the more pertinent consideration). So I’ll just point out that the four cents and $40 are not comparable figures, because (presumably) the personal time spent earning the $40 was not the same as the personal time spent earning the four cents.

    I.e. while both activities (earning money mining bitcoins and earning money selling ads) involve little or no direct personal involvement, they each required some up-front effort in a variety of ways. I’m guessing the process of getting set up to mine bitcoins was closer to the process of enabling ad revenue in the first place, rather than to the process of writing articles that will generate ad revenue.

    TANSTAAFL

    • Florian Bösch says:

      Mining is the activity of performing a proof of work, that is required to produce a block, which is what keeps transactions chugging along, safely, so everybody can send around coins.

      How much energy do you think your banks and credit institutions use to perform the same activity?

      • HarveyBoing says:

        I have no idea. But I’m sure they get paid way too much for the privilege of handling our money. And I assume that “way too much” is plenty to cover their electric bill and have some left over.

  7. knoxblox says:

    I’m not by any means an economist, but isn’t it a good thing that the desire to manufacture and own bitcoins is a bigger exercise in frustration than the effort to provide desirable goods and services in exchange for said bitcoins?

    Isn’t the prevalence and use of bitcoin as currency the very thing that will keep the system afloat? I mean if people are in hoarding mode, then what good are they?

    • max00 says:

       High turnover is probably a prerequisite for stable exchange prices (but not necessarily sufficient).

      It seems the speculative bubble is going go on for quite some time. And there will probably be some more bubbles.

    • Antinous / Moderator says:

      I’m not by any means an economist, but isn’t it a good thing that the desire to manufacture and own bitcoins is a bigger exercise in frustration than the effort to provide desirable goods and services in
      exchange for said bitcoins?

      You crazy kids and your “food” and “housing”.  Why can’t you see the value in good old-fashioned making money with no work or production involved?

  8. Warren_Terra says:

    If you still want to buy bridges in the US, just reply to this comment. I’ve got some beauties, lightly used by grandmothers driving to church on Sundays.

  9. BillGlover says:

    Bitcoin is a little like Second Life. It’s very flawed, but hard to replace with something better, so far.

    Both are also nice, toy environments for experimenting with ideas that would be too hard, dangerous, or expensive to try in other places.

    Both can be used for some useful things right now.

    Both have encouraged large amounts of (furry) porn.

    In both cases, I suspect they will likely inspire more useful successors and will be remembered as charming in a nostalgic sort of way.

    I am not Satoshi

    • BBNinja says:

      Hell, with a lot of creativity and an amateur background in 3d modelling and programming I’ve made thousands of dollars from Second Life.  I don’t even play it regularly anymore.  But the stuff I’ve made in the past continues to sell itself.

      I’m still surprised that LL still uses the same buggy architecture from a decade ago for SL and that it hasn’t been upended by something better.

  10. BBNinja says:

    I find Bitcoins hilarious.  I think they’re analogous to the old “get paid to click ads and take online surveys!” shtick.  Someone from a gamer group I’m in was talking about how much money you could “potentially” make if you had some sort of supercomputer by mining Bitcoins.  My reply was…”I just go to work.”

    Bitcoins: 0 Regular Paycheck: 1

    • Florian Bösch says:

      Would you still find it hillarious if you learned that bitcoins are a medium of exchange that does not require counterparty risk, is not based on debit and/or credit, can safely transfer any amount of coins to anybody else anywhere in the world for little (less than 0.1%) or no fees inside of 10 minutes, is not controlled by any government or third party, has no central point of failure because it is peer2peer, does not allow for the arbitrary introduction of circulation, solves the double spending problem, makes transactions irreversible, is easy to integrate for internet merchants and has appreciated between 500-1000% year over year?

      Of course it’s also volatile, but there had to be a downside among all the good stuff.

      • BBNinja says:

        Sure, irreversible transactions are great for online drug dealers and other shady merchants but it’s not so much of a good thing for everyone else.  Product doesn’t arrive as promised…or doesn’t arrive at all?  Hope you’re not expecting a refund.

        Also, I wouldn’t call it “safe” at all.  Bitcoin’s anonymous and “irreversible” transactions which you cite as a good thing also makes it incredibly vulnerable to theft and hacking.  A dollar in my pocket is practically more safe.

        I would go as far to agree that Bitcoins are novel but I wouldn’t invest in them except as a novelty item and I’m not going to leave my computer running 24/7 to make a few cents worth.

        And personally I’m not aware of anything legal that can only be bought with bitcoins and for less than normal currency.

        • Florian Bösch says:

          Irreversible transactions are great for internet merchants who are plaqued by PayPal&co.

          The protocol of bitcoin also supports arbitration, escrow, service bidding, crowdfunding, delayed release etc. The irreversible transaction is just the most often used and the one that is exposed in the client.

          Provided you are not exposing your private keys, the coins living in the cloud are quite safe. Cracking them would require attacking a double/salted sha256 hash, which would require on the order of about 10^77 attempts.

          If you’re worried about the safety of your private keys, there are a number of services popping up to keep your bitcoins. You can also print your private keys on dead wood and put them in a safe, this is known as cold storage.

          Mining is a specialized activity performed with custom built hardware (increasingly also custom built microprocessors). These machines sell between anything from $7000 to $30’000 and more and are highly sought after. If you thought that you hit the golden age of bitcoin mining, no, that has come and gone by about 2010 with first CPUs becoming obsolete and now with GPUs becoming obsolete.

          Places or Lists of places that accept bitcoin:
          - https://www.spendbitcoins.com/places/
          - https://www.bitcoinstore.com/
          - http://bitcoin.travel/
          - http://www.bitcoindir.com/
          - http://bitcoindirectory.net/
          - https://en.bitcoin.it/wiki/Trade

        • reverbe says:

          A few things you can do w/ BTC

          -Buy MOSTLY ANYTHING on bitcoinstore/bitmit/etc 
          -Buy a car 
          -Buy from one of many thousands of merchants through bitpay
          -Buy PMs – gold, silver, copper, etc 
          -Sign up for the online dating service OKCupid, or store on Mega, or tip people on Reddit, or pay for your blog on WordPress etc. 
          -Donate your favorite open-source software project or charity
          -Invest, share, send, receive, put, call, trade, speculate, hold, buy, sell, give, flip, mix, spend, piss off Bernanke

  11. smut clyde says:

    The phrase “Dunning-Krugerrands” deserves wider currency.

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