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Comment by 9ac345a5509a | Hacker News Reader

According to this calculator [0], in one month, you can expect to earn $20,724.53 dollars (ignoring price changes, difficulty changes, and operating costs). This seems too good to be true, however. Invoking the old adage, "In a gold rush, sell shovels."

I wonder what effect all this has on the Bitcoin economy. If everyone begins doing this, then it will become extremely difficult to mine any Bitcoin without any sort of gear. Feathercoin [1] appears to try and stop this, although I am not sure how effective it is.

  [0] http://www.alloscomp.com/bitcoin/calculator
  [1] http://feathercoin.com/

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in one month, you can expect to earn $20,724.53 dollars

They were selling the kit for $22,000, so it'll take at least 5 weeks for the ROI, probably longer given there will be at least 2 difficulty resets in that time frame.

I looked at investing in one but I couldn't come up with the funds. Instead I have pre-orders out for gear due in October.

If everyone begins doing this, then it will become extremely difficult to mine any Bitcoin without any sort of gear

This is already the case. I'm mining at about 250GH/s with 3 Avalons and I earn on average about 1.2 BTC per day per machine. A month ago is was closer to 2BTC per machine per day. Right now, GPU mining is dead. It's literally cheaper to buy a bunch of USB sticks that mine at 350MH/s for $100 each than to buy a bunch of video cards as the USB sticks are more power efficient. Even so, depending on the difficulty, those USB sticks could take a year to earn back the 1BTC.

If it's so difficult to earn currency, then is it viable to use for end users? Is it just that everyone uses fractions of BTCs now?

>is it viable to use for end users?

For mining, no. This was always seen as the future state, it was just a question of when. Not too long before the first ASICs started coming out, it was already basically not profitable for most people, you had to be running a limited set of GPUs and be in a place that had cheap electricity to make any real money.

>Is it just that everyone uses fractions of BTCs now?

Since they're roughly $100 each, yes, basically everyone uses fractions. Thankfully they're way more divisible than e.g. pennies, and if the value / userbase goes up by a couple orders of magnitude, they can be made more divisible, also unlike pennies.

Mining is there to make sure there are no double spends. The end user does not need to worry about them. Just sell stuff or buy them at exchanges or the other way around as with any other currency.

Since I hadn't heard about the USB sticks, and since the results of those are very relevant, I found this a bit interesting: http://thegenesisblock.com/asicminer-usb-bitcoin-miner-price...

So yeah. The shovels seem to run a decent risk of being worth more to sell than to use.

> it will become extremely difficult to mine any Bitcoin without any sort of gear

It already is and has been for a long time

> Feathercoin [1] appears to try and stop this, although I am not sure how effective it is.

IMHO, Feathercoin should not be taken seriously.

Litecoin as well? I think the goal (forcefully allowing a wider base by reducing the ability of big players) seems like a good one. It prevents centralization, which is kinda the point of the whole thing.

People could still create humongous litecoin mining farms if it were profitable to do so, leading to the same centralization issue of having large mining pools/firms that are somewhat dominant.

That said, the point of Bitcoin is not to avoid that; it is to avoid forced centralization by governments (among other things), which we have for fiat money, and it is succeeding at that.

Bitcoin is not supposed to be a democratic experiment where the little guy gets some kind of special treatment. It is a digital currency that is not backed by force.

I don't think there is any real point in having more than one cryptocurrency. Litecoin could have been great if it had come first, but Bitcoin came first, so I think there is little to no point in having Litecoin.

They absolutely could build huge farms, but their advantage in doing so would be significantly less than an average person with a general purpose computer, compared to now. They would effectively have less power over the network as a whole, because it's easier to become profitable (or at least less lossy) and compete, so more people would (theoretically).

Yes, bitcoin is not a democratic currency. But it is designed (and desired) to prevent all power from landing in the hands of very few / one, since then the entire foundation it's built on is worthless. Bitcoin is fundamentally stronger with more players, and Litecoin is easier for more players to join.

Absolutely, it came out a distant second, and that very well could be it's death. But why is there no real point in having more than one? With more than one, "money" is more resilient against new crypto attacks.

As you can see from http://bitcoindifficulty.com/ the difficulty is growing exponentially. It seems to be doubling every 8 weeks or so. If you get your 400GH/s rig at the end of the month you might not even break even.

I like the calculator at http://mining.thegenesisblock.com/ better. Using the defaults for network and all that it seems to give around $23,000 profit for the year.

What amazed me about that: Within 9 months, your profit drops below $1k/m. Barely three more months later and you're down to $250/m. So after a year, you're fast approaching the point at which the energy you put into the device costs more than the bitcoin money you get out of it.

Play with the knobs some more and you realize: If you purchase the 400 GH/s August device in December, you will never make back the 7.5k that the thing costs. Wait "only" until November and you barely get a 60% ROI.

That's some fast, fast market right there.

You're assuming that the value of Bitcoin stays fixed at $100.

Just like the model probably doesn't include what it means to add a large number of 400Gh/s devices to the playing field.

There's a field to change the bitcoin exchange rate over time.

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