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

[wl589]

Sorry for my use of words. By "ruining the whole thing" I meant my personal gains. It is way too troublesome compared to other ways of making money. Very little, if any, people become millionaires from bitcoin mining. If I want to make money outside of work I'll take it to the stocks.

 

[Darkman69]

In general I agree with Darkman. A more in-depth research into Bitcoin, or any crypto currency, is necessary in order to understand how it differs from fiat currency; money that is money only because the parasites say it is. The [enforced] scarcity of Bitcoins will be part of what gives them their value; the parasites can't steal their value by arbitrarily creating more of them.
Some of the links I included explain how more places are beginning to accept them, so you can use them even if you don't sell them for your local currency.
Looking at the BTC network today, it would not make sense to buy one or more HD7970's for mining; two or three months ago it still did. Were I to cash out now, that HD7970 would have only cost me $200-$250. Should BTC double in value (probably more likely than crashing, but both are possible), the card would be "free;" and that is after electricity costs.
I don't believe anyone here is suggesting that mining BTC is enough to earn a living wage (or anywhere near it), but if it offsets the price of a [substantial] graphics card upgrade? It won't after this summer, but for the next few months might still be worthwhile if your electricity costs aren't too high.

Sorry for my use of words. By "ruining the whole thing" I meant my personal gains. It is way too troublesome compared to other ways of making money. Very little, if any, people become millionaires from bitcoin mining. If I want to make money outside of work I'll take it to the stocks.

Bitcoin is all about what you put into it. (You get out what you put in) First you need a high paying job to pay for the hardware to tangibly mine enough Bitcoin to make solid profit. If you can invest $10,000 into Bitcoin mining equipment today you stand to increase you monthly income by a very handsome number. Which brings me to my next point which is Bitcoin is not free as you still have to work or offer a product to society in order to even start to invest into Bitcoin and turn a profit/invest. That's also aside from the large amount of patience, time and knowledge including an extremely solid foundational understanding in mathematics and computer componentry that a successful Bitcoin miner needs to posses.

 

[smeezekitty]

Most people cannot spend 10k on hardware.

 

[Darkman69]

Most people cannot spend 10k on hardware.

See if you poor like most of us then you can't make much money from Bitcoin mining but if your rich than you can.

 

[Onus]

Most people cannot spend 10k on hardware.

Absolutely true. $500 would be a lot more realistic. I think the point was that if you expect to make money bitmining, you need to treat it as the business that it is, with the same level of investment required as any business.
I do it as a sometime hobby; all it will ever do for me is discount the purchase price of whatever AMD gaming card(s) I buy. Hopefully, it will also, if in a small way, support a currency model that addresses some very real issues with the current monetary system. Taking the absolute control of monetary policy out of the hands of people who may have never produced anything of value in their lives can only be a Good Thing, whether it is BTC, Litecoin, or some unnamed successor.

 

[samuelspark]

Thanks for the article. Finally understand what BCs are about now.

 

[slicedtoad]

Awesome, nice to see an article on bitcoins from the viewpoint of someone who's been fairly dedicated to mining them.

 

[Adam Russell]

Im curious about something. I understand there will be an upper limit of 21 million bitcoins and after that NO MORE WILL BE CREATED. Im also aware that the support for the bitcoin calculations comes from 'volunteers' that are paid in freshly created bitcoins. So when the limit is reached and they no longer can be paid then how does the system get calculations support?

 

[sunsmasher]

It seems pretty obvious at this point that inside speculators are manipulating the market for Bitcoins and cleaning up at the expense of those who don't know better. imho

 

[Onus]

Im curious about something. I understand there will be an upper limit of 21 million bitcoins and after that NO MORE WILL BE CREATED. Im also aware that the support for the bitcoin calculations comes from 'volunteers' that are paid in freshly created bitcoins. So when the limit is reached and they no longer can be paid then how does the system get calculations support?

Bitcoin transactions often include a tiny "service fee" that is extracted by the miners. These fees will still be present, and should remain sufficient to support the bitcoin network.

 

[chomlee]

First off, very interesting article. Never heard of bitcoins or mining but very interesting nonetheless. What I dont understand is how you are actually earning bitcoins. I can understand how you were able to optimize your hash rate etc but I don't know what you are hashing earns bitcoins. In one statement you talked about breaking signitures/passwords. Are you saying that bitcoin mining is done by breaking passwords, firewall encryptions, website encryptions and basically everything that considered major criminal offenses? Could you elaborate on this because if the later is true, I am shocked that an article like this exists on Tomshardware promoting the hacking of peoples passwords/encryptions.

 

[4745454b]

Where did you see breaking passwords? I read the article and don't remember mining doing any of that.

The theory goes that mining "runs" the network and slowly makes new coins. That's it.

 

[brazuka331]

They sound like a good investment idea....

 

[brazuka331]

Buying and selling bitcoins not actually mining.

 

[pit_1209]

Guess I´ll keep watching from the bleachers then. XP

 

[nforce4max]

Bitcoins were a nice concept for those who got in on the mining early enough at the start of the gpu mining era and the rest that bought when the price was low. With every boom there is a bust then an agonizing and slow recovery.

 

[Darkman69]

Bitcoins were a nice concept for those who got in on the mining early enough at the start of the gpu mining era and the rest that bought when the price was low. With every boom there is a bust then an agonizing and slow recovery.

It has nothing to do with boom and bust. Bitcoin is all about putting in what you get out. You want large returns you have to invest larg money and it's that simple.

 

[smeezekitty]

But it gets so increasingly difficult that almost nobody can get them making them essentially pointless.

 

[Darkman69]

But it gets so increasingly difficult that almost nobody can get them making them essentially pointless.

Once again this comes down to the fact that you have to invest large money and take large risk when mining Bitcoin if you are after big profit or coins. Bitcoin is a business and you will just be steam rolled if you can only invest small amounts of time and money into it.

 

[DRosencraft]

But it gets so increasingly difficult that almost nobody can get them making them essentially pointless.

Once again this comes down to the fact that you have to invest large money and take large risk when mining Bitcoin if you are after big profit or coins. Bitcoin is a business and you will just be steam rolled if you can only invest small amounts of time and money into it.

The problem is that in most legitimate business models there is at least a foreseeable means of a return on investment. If you start a business the idea is that the business succeeds and you make back the money you spent investing in the business. Mining Bitcoins at this point would essentially require you to spend more money than you can reasonably hope to make back through mining Bitcoins, which I think is the article's point. If you already have the means and resources to spend on the PC to effectively mine at this point, chances are you have a lot of other more reasonable and safer means of investing your money than this. Spending thousands of dollars on a Bitcoin mining setup right now is an overly aggressive and bad investment idea. Mathematically you'd be better off buying a bunch of lottery tickets.

 

[Darkman69]

But it gets so increasingly difficult that almost nobody can get them making them essentially pointless.

Once again this comes down to the fact that you have to invest large money and take large risk when mining Bitcoin if you are after big profit or coins. Bitcoin is a business and you will just be steam rolled if you can only invest small amounts of time and money into it.

The problem is that in most legitimate business models there is at least a foreseeable means of a return on investment. If you start a business the idea is that the business succeeds and you make back the money you spent investing in the business. Mining Bitcoins at this point would essentially require you to spend more money than you can reasonably hope to make back through mining Bitcoins, which I think is the article's point. If you already have the means and resources to spend on the PC to effectively mine at this point, chances are you have a lot of other more reasonable and safer means of investing your money than this. Spending thousands of dollars on a Bitcoin mining setup right now is an overly aggressive and bad investment idea. Mathematically you'd be better off buying a bunch of lottery tickets.

The point of mining Bitcoin is because you understand it in that Bitcoin is a long term (Investment) and the people that seriously mine and trade with Bitcoin do it more to support the Bitcoin economy and enrich and reinforce the Bitcoin network. If anyone ever thought of Bitcoin as a get rich quick thing then they really have no clue as to how Bitcoin works. Bitcoin mining is not for a 15 YO gamer with an AMD GPU lol and it never was or will be.

 

[bootsattheboar]

You forgot to mention the size of the public transaction block chain for bitcoin from day 1. Takes forever and a day to download, and will only grow ever bigger as time passes.

 

[Onus]

I do agree that getting into Bitcoin mining, even as a business, is very risky. While philosophically, Bitcoin has definite strengths compared to existing currency, it also possesses unique weaknesses. Even if it is on the right path, it may not be the final destination, which adds further risk. Still, if you're able to mine now, with what you have, it shouldn't hurt you. Another $20/week in pocket change probably deserves a "Why not?"
OTOH, the total BTC economy is extremely small. Should it grow, in particular in spite of the efforts of parasites (i.e. government officials), each BTC could conceivably end up worth a considerable amount. I wouldn't invest "real" money in it, as I'm rather risk-averse. Still, if the limited BTC I can get by mining do nothing more than offset the cost of a powerful graphics card that's great for games, I haven't lost anything by doing it.

 

[g-unit1111]

This almost kind of sounds like a Ponzi scheme. You're basically putting a finite amount of resources out there for the taking. Then people give you just as much back in the hopes they themselves will get more out of their initial investment.

 

[Darkman69]

I wouldn't invest "real" money in it,

If by real you mean the monopoly money that the government can print off at will and has a lock on by the use of force LOL. FIAT currency only has power over people because of the apathy of the people.