All About Bitcoin Mining: Road To Riches Or Fool's Gold?

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How does mining new coins make sense if there will ever only be 21 million? I am so confused by that point.
Another thing is, with an economic system like this, a billionaire can easily manipulate market prices and make extremely large amount of money and still be completely fine due to this being in a grey area of the law. You can't pump and dump stocks legally but it seems pretty easy for something like this considering you can dump the bit coins off as currency in any country.
 


To quote the Bitcoin wiki page: "The last block that will generate coins will be block #6,929,999 which should be generated at or near the year 2140."

So to directly answer your question, the whole reason for mining bitcoins is because you'll most definitely be dead before the last block chain is even completed.
 


someone needs to rewrite the algorithm and somehow hook up block generation to folding@home or some similar constructive use of the computational power.
 

That would be a great idea. Verifying a relatively small hash to screen out the cheaters then perform something useful like F@H.

 
A very interesting read. I had been reading about Bitcoins (mainly because I just couldn't figure out what they were exactly), but this clears a lot of things up.
Also, at the bottom of page 5, in the Comparison of FPGA and ASIC Chips table it says "Power Fraw".
 
Fiat currencies... I guess for some people the dollar wasn't worthless enough.
It is amazing how you can lose your "wallet" and your funds permanently disappear from the pool.
 
Never heard of this and I'm quite confused by it. Use graphics cards to find units of a currency that from what I can tell must be extremely succeptable to artificial inflation or all out collapse.
 
In 2010 I started bitmining and reached 3 bitcoins in 2 months with a 5850. Each bitcoin was worth 3$ at that point so I just gave up and lost my wallet. If I only knew 3 years later they would change for 150$ each... :face palm:
 
Thanks for your calculations. I now have more things to laugh about here in Australia when I read about bitcoin "miners" setting up multi-gpu rigs when our power price is around the 25c per KWh mark and rising by 5% annually.
 
I've only skimmed the article, but I didn't see a good discussion of mining pool, trading and all the DDoS, phishing and hacking that goes with it.
The technical aspects and financial calculations are one thing, but going bitcoins is somewhat of a hornets' nest, and it's really worth discussing this stuff.
I haven't mined seriously, but the first time I tried (for two weeks, generated half a bitcoin), I left the bitcoins in the pool and one of the pool's founders embezzled and took what was there and left. I've seen other pools hacked, and there are regular DDoS attacks on them, changes in the terms, all kinds of things you really need to follow carefully if you want to mine effectively. Just leaving your miner running and hoping that you'll get the expected coins eventually doesn't cut it.
I currently mine a little LTC for fun (partly because after installing Catalyst 13.4 I can't mine BTC and can only mine LTC with an old cgminer version I have installed). I'm not sure that it's worth it financially, and I'll probably shut down mining in the not too far future.
 


Yup, that's exactly what I'll be doing! There's always something in the news about it every month these days. :)

 
this is why i think TH is one of the best IT news website around nowadays... thanks for a very interesting article and for sharing the good and the bad with newbies like me on that subject.
 
I am also wondering how he got the HD7790 in June 2011, except if this is a typo because later on in the same page he talks about November 2012.
 
Great article, I have been wondering what the fuss was all about. Now the only question I have is:
What is all this processing power being used to do?
As it was mentioned in an earlier comment, it would be great to use it for something like scientific research like F@H...but I have never seen anything explaining IF it is being used, and if it is, what it is being used to do.
 
Great news, since BTC mining with GPUs is now a lost cause, time to buy the nVidia GTX 780 card and enjoy its gaming performance instead of worrying about its OpenCL capabilities (or lack of 😀) LOL

EDIT: and yeah, that is such a waste of computational power and electricity, that is used to create really nothing at all, if this goes towards a good beneficial cause while mining it would be such a great project, like reCAPTCHA is used to digitize books while providing bot and SPAM protection!
 
Great article, thank you. It definitely doesn't seem like bitcoin mining is a worthwhile endeavor, unless you are predicting that its price will rise sharply over the next few years.
But in that case, you can also simply just buy bitcoins.
 
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