So, any of you guys giving into the BitCoin craze? (in Off-topic)


Sickone June 12 2011 6:46 PM EDT

Long story short, BitCoin is a (relatively) new "cryptocurrency".
http://en.wikipedia.org/wiki/Bitcoin

It only gained some (relatively) serious notoriety a few months ago when it started to get featured in newspapers, radio and so on.
Needless to say, there was a near-literal explosion of demand for the currency, which made its value skyrocket... but it's far from stable and can fluctuate wildly from day to day, one day up, another day down, absolutely no guarantees whatsoever.
http://twitter.com/#!/bitcoineconomy

As you can see, it's far from stable right now, but it MIGHT stabilize eventually. Trading it for cash is not quite trivial, but it's not THAT difficult either, there are a few "trade houses" (I'm not going to recommend either one).

The only way to generate new Bitcoins is to "mine" for them.
CPUs are quite slow, video card GPUs are much better ; also, thanks to the video card architectures (long story short, has to do with number of arithmetic units), ATI cards are about 3-4 times better than NVIDIA cards of similar gaming performance.
Setting up a "miner" is not exactly trivial either (the default software only comes with CPU mining included, you have to get one of the GPU miners, configure and run them manually for each of your video cards).
If you "mine" on your own, the chances to "get the pot" of 50 BTC (on average, a new "pot" should be generated every 10 minutes or so, and some time next year the pot's going to be lowered to 25 BTC) are quite minimal, but you can join a "mining pool" and whenever the pool earns some BTC, you get paid a proportional share (there are others that simply pay constantly per share instead).
Setting up pool mining is not significantly more complicated than getting a GPU miner running (each pool has halfway decent instructions on how to do it), but, eh, it's enough to turn off quite a few less technically-inclined people.

As to WHY BOTHER with it... well, I'll say this again, there are no guarantees, but right now, at least for early adopters, it can probably pay off nicely.
http://bitcoinx.com/profit/index.php

Of course, the value may end up crashing, or difficulty might jump up radically, so, again, no guarantees.

Admindudemus [jabberwocky] June 12 2011 7:00 PM EDT

i got bored with it, they use it on minethings as one of their accepted currencies but after many hours and no coins i said to heck with it.

AdminTal Destra [G6] June 12 2011 7:02 PM EDT

explain to me how this is supposed to work?

Rubberduck[T] [Hell Blenders] June 12 2011 7:03 PM EDT

I looked at it a while ago after a friend mentioned it to me. He had caught the network admin of a company he writes software for running it on their servers :)
The generation mechanism is interesting, never tried it though.

AdminQBnovice [Cult of the Valaraukar] June 12 2011 7:27 PM EDT

Looks like something I should check out...

So are they intending to eventually do something real with all those cycles?

Underage Drinking June 12 2011 8:23 PM EDT

what someone is saying about BitCoin 'If bitcoin can work, so can bitpon. That's right, virtual tampons that you have to mine. It's gonna be HUGE. '

What I dont understand is how can I generate them, the sites for Bitcoin all talk about what I can do with them but not how to get them. well there is the faucet but its down for maintenance.

Eliteofdelete [Battle Royale] June 12 2011 8:35 PM EDT

You "mine" them with your cpu. I stopped using it because it kept my fan running on my laptop which got annoying.

Sickone June 12 2011 8:58 PM EDT

after many hours and no coins i said to heck with it.

If you're only using your CPU to "mine" solo, it could very well be DECADES before you get any.
An overclocked Core i5 2500K only gets about 20 MHash/sec. At the current difficulty level, the average generation time is almost 4 years, and it's random (so you could get one in a few months, but it could really take decades).
A Radeon HD 6770 (a 125$ video card) can push between 180 and 200 MHash/s, so an average generation time of nearly 5 months.

Either use a serious GPU to "mine" solo for months on end before your first "payday", or instead participate in a mining pool that shares the rewards for somewhat steady smaller payments (the pool itself keeps a small fee to keep in business).

>So are they intending to eventually do something real with all those cycles?

https://en.bitcoin.it/wiki/Man_page#Why_can_t_it_be_doing_something_useful_for_humanity_instead?

Q : Why can't it be doing something useful for humanity instead?

A :SHA-256 hashing has very specific properties that we need. In particular, it generates (with predictable CPU required) numbers that are for all practical purposes purely random, but in a way that is easily verifiable. There are no known "beneficial" calculations that could replace this. This CPU time and electricity is not entirely wasted, though: it helps protect the network from attack.

Sickone June 12 2011 9:01 PM EDT

Considering the fact the difficulty is adjusted every 2 weeks or so (to keep generation steady across the entire network to roughly one 50 BTC batch every 10 minutes on average), and the difficulty usually keeps going up (as more and more miners join in), the only sane method is to join a mining pool - the larger (i.e. more popular) the pool, the higher your chance for a steady "payment".
And if you're only going to use the CPU to mine (i.e. not get a GPU miner and configure it), better not even bother mining.

Sickone June 12 2011 9:10 PM EDT

Using the same Radeon HD 6770 given as an example, if you join a mining pool, you can expect to earn on average (at the current difficulty, which will most likely keep increasing every 2 weeks as long as more people join in to the mining craze) about 0.013 BTC per hour and at current exchange rates, that's roughly 0.25 USD per hour (but as I said, exchange rates are highly volatile).
Also, the electricity cost from running it will probably be around 0.05 USD per hour or thereabouts, so you're basically looking a 20 cents per hour, or about 5 dollars per day.
Not such a big deal, but still... the video card would basically pay for itself in a month or so.

Admindudemus [jabberwocky] June 12 2011 9:26 PM EDT

i was using a powerful gpu, i forget my hash rate but it was respectable compared to what others were getting. i let it go six weeks solo mining looking for the big payoff rather than the smaller guaranteed one with a pool.

the exchange rate fell quite a bit while i was watching it and basically i just forgot to restart it once after i needed to shut down my computer. i do think that, even with the current exchange rate, you could do better by selling cbd! ; )

it will be interesting to see how many games will start accepting it as a currency for in game items / perks. i think that is likely the best opportunity for the whole system as the gamers are the ones with true hardware to make it viable. we shall see though.

Sickone June 12 2011 9:28 PM EDT

http://bitcoincharts.com/bitcoin/

Current network total power : 6.313 Thash/s

That's the rough equivalent of 30k-35k Radeon HD 6770s working right now, or over half a million mi-end CPUs, all of them fighting "at random" over who will get the next batch of 50 BTC (right now, generating about 9/hour, or one every 6 minutes 40 seconds).
The difficulty will jump up again quite noticeably in the very near future (2-3 days or so), to "reset" the baseline to one every 10 minutes, then again in about two weeks (most likely less) and so on and so forth.
Difficulty can go down too, but that would mean somebody would have to leave the network to lower total hash/second averages first for a good while.

:)

Sickone June 12 2011 9:35 PM EDT

i do think that, even with the current exchange rate, you could do better by selling cbd!

Well, I doubt you can even get up to 1$/day from selling CBD without multi-ing, but then again, you can earn up to 5$/day net (after power bill) from a 125$ video card while being in a mining pool.
And nobody says you have to limit yourself to one video card or one computer.
Then again, you might want to watch your total power consumption, lest you be confused by the police with a weed growing op :p

www.google.com/search?q=police+confuses+bitcoin+weed

:) :) :)

Sickone June 12 2011 9:39 PM EDT

Admindudemus [jabberwocky] June 13 2011 9:00 AM EDT

you did state correctly early on that the value is fluctuating wildly which is very true.

later you stated you can make a fixed amount per day using a particular card. are you using the lowest possible rate then to get that daily figure or the highest or an average over the past few weeks?

how much have you converted to us dollars so far? how much have you averaged daily, weekly or monthly?

Admindudemus [jabberwocky] June 13 2011 10:00 AM EDT

i found some charts online and the value has done some crazy things since i got out of it in april or so. it really looks like a bubble to me but only time will tell.

at least the cbd to usd ratio has held stable for quite some time now.

one thing for sure is that it will be interesting to see what the prices of bitcoins do over the next few weeks or months.

Sickone June 13 2011 11:22 AM EDT

later you stated you can make a fixed amount per day using a particular card. are you using the lowest possible rate then to get that daily figure or the highest or an average over the past few weeks?

Much simpler - using the current difficulty, and assuming the pool as a whole gets close to the average statistically expected amounts per day.
There's 3 large pools with roughly under a quarter of the total network hash pooled into each, and there's at least 144 batches of 50 coins generated each day (right now closer to about 218 per day, but will get very close to 144 per day in a couple of days, then again trend upwards), so you expect each of the pools do get at least some batches each day, and those can be claimed by each each earner at just about any time (with some limitations depending on the pool)... but more importantly, you expect them to get close to the average on a daily basis (or at least very close to the average on a weekly basis).
When you're using a large pool, you may earn only bits and pieces, but you start earning them almost right away.

Admindudemus [jabberwocky] June 13 2011 12:30 PM EDT

yep that is the simple part, the part i was asking about though was you taking that number and converting it to a usd amount per day earned. what were you using for that conversion rate was the question.

Sickone June 13 2011 1:15 PM EDT

I used the exchange rate at the time I made the post.
There's 3 links in the OP. See the second :
http://twitter.com/#!/bitcoineconomy

Admindudemus [jabberwocky] June 13 2011 1:23 PM EDT

historically the rate has been averaging much lower though. this chart shows that fairly well.

http://bitcoincharts.com/charts/mtgoxUSD#tgCzm1g10zm2g25

Sickone June 13 2011 1:41 PM EDT

The difficulty of generation (for a certain hash/sec rate hardware) goes up radically in under 2 weeks on a regular basis as the total network power increases (and it's been increasing nearly exponentially lately), so there's a strong incentive to have an increase in BTC exchange rate value whenever a difficulty increase happens, and the next one is due in 2-3 days or so.
Granted, sometimes when the exchange rates spike like that, it would make more sense to buy rather than mine bitcoins (if you could have any guarantee you could unload some at the next peak and rebuy at the bottom), but then again, such speculation can prove risky (not to speak of actual effort involved in arranging all the appropriate RL-cash transactions).
As long as we keep having waves of adopters (mining or just purchasing or even just new sites that accept BTC as payment) the exchange rate is bound to be quite volatile (and on a mostly upwards trend), but it will (hopefully) eventually settle down (almost certainly lower than its peak though, thanks to at least a bit of bubble effect).
That's why I called it "craze" and used words like "risky" and "no guarantee" instead of calling it an "awesome way to make quick and sure cash" ;)

Sickone June 13 2011 1:53 PM EDT

This one probably makes a tad more sense though:
http://bitcoin.atspace.com/income.html
...basically "how much income would a 100 MHash/second machine working for a pool bring in per day in USD" history graph.

Note that the scale is not linear, it's logarithmic.
Might make it a bit confusing to read at first.

A Radeon HD 5750 (or two 5650s, or three 5550s) give very roughly about that much hash/s (exact number depends on card model/make, on how you fiddle with the clock settings if at all, on GPU miner software used and its settings, etc).

Eliteofdelete [Battle Royale] June 13 2011 5:48 PM EDT

So it looks as if the daily value is around 2-4 dollars per day. However, I suppose you could wait till the price peaks to sell your profits which means you could make around 5-6 dollars a day, just might have to wait for a bit.

My question is, is it even worth the power to run the computer and AC to cool the house?

Sickone June 13 2011 6:50 PM EDT

The 3rd link in the OP takes into account power use (include AC power use in it), cost of energy of where you live (change it to however much you actually pay), and a few other things, all of which you can manually alter to see best/worst case scenarios.

Eliteofdelete [Battle Royale] June 13 2011 7:02 PM EDT

Ah thanks, that is quite interesting :).

DoS [Battle Royale] June 13 2011 7:58 PM EDT

Snake power from a coffee shop or university and profit :D

Admiralkiller June 13 2011 8:10 PM EDT

Have fun doing that while I go to work and make normal people money.

Underage Drinking June 13 2011 8:23 PM EDT

AK is right, and besides this is no different thank buying into cb at any point in the game.

Sickone June 13 2011 11:51 PM EDT

besides this is no different thank buying into cb at any point in the game

I don't quite follow the attempt of an analogy. How exactly is any of this *anything* like buying into CB ?
It's like saying that helping out some new company and getting paid in stocks of that company is no different from buying a spot into a rookie poker league, or something like that...
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