Someone please do the math on the energy lost in GPUs calculating hashes compared to the dollar value of the bitcoin rewards. The average miner might be better off just powering down their machines.
On the other hand, lots of other people will probably power down their miners, too, so that mining will become easier again. Then it could become feasible to mine again...
I am actually sorry about the waste of energy, but I decided that for once I'd join in the fun. I have never owned a car, so I hope that makes up for the waste to some extent.
When I started my analysis was essentially "if I am lucky I can get back my investment and get a new gaming PC that pays for itself".
There is a constant for M that is independent of P, M_power_leech.
I saw it pointed out somewhere that bitcoins are meant to be rare, and that once the final bitcoin is generated, as there's meant to be a set ammount, there will be many orders of magnitudes less of them than dollars, euros, or the etc. So, even if the cost right now is high, having a hash of them could become worth a great deal.
That is of course speculative, but when there's going to be 1 bitcoin for every 600,000 of today's dollars...assuming the sum of bitcoins becomes worth a thousandth of that of dollars, each bitcoin will be worth 600 dollars...run a mining op for one coin a day for a year(365 coins), hold onto it for a while, average the price down to 300 dollars a coin...sell for a hundred grand...
So running a bitcoin mining opp, or even buying the coins at current market value, is a feasible long term high risk investment. I wouldn't suggest putting all your eggs in that basket, but I would suggest adding the purchase of the occasional bitcoin (or the cost of mining) to your list of high risk investments.
When bitcoins become rare why won't someone else start a new bitcoin2? I think there's an asymptotic max price that can't be crossed.
The rules are as follows:
1. Every string of bits that is a bitcoin is also a Bitcoin Prime.
2. Currently I own all extant Bitcoins Prime, but I'm willing to sell them. Right now I am willing to sell them at a 50% discount relative to Bitcoins, so you can get twice the Bitcoins Prime for your US dollars.
You'd be an idiot to buy Bitcoin when you can buy Bitcoin Prime at half the price, right?
As for estimating the whole network's energy, here's a gross, probably exaggerated way to measure it. My 5870 gets 370 Mhash/s at 188 W. The current network rate is 2000 Ghash/s. 2000 / 0.37 * 188 = ~1 megawatt. Seems reasonable, especially since it's distributed worldwide.
However, a mutual fund represents a consistent and safe income. I very much doubt that bitcoin mining will remain as profitable as it is now for very long.
Assuming the cost of the electricitiy is 1.26 cents per kwh, and your machine is running at around 800 wats, constantly, that's 720 hours and 576 kwh, seven dollars a month...so the cost of running doesn't seem to be that high either.
Edited for bad math. May continue to do so. Please point out errors.
1) Since 1971 (40 years) is roughly 1300%, which is 19.63% annualized (1.1963^40 = 1300).
2) Since 1950 (60 years) is roughly 7680%, which is 16.08% annualized (1.1608^60 = 7680)
I think you'd be better off going to the nearest bank with your $1,000 and buying an I bond. It's not a popular thing to do (only grandmas seem to like these things), but it's a pretty much slam dunk investment with zero risk.
That said, I suspect such a high level of profit won't last for long. It remains to be seen whether the current high value of bitcoins will last, and the more miners there are, the more profit has to be shared.