Crypto currency mining

[Markr]

Anyone looked at the price / performance of the GPU instances in AWS?

[moltuae]

Originally Posted by ainarssems

This is hypothetical but rig with 4 RX480 cards if you can get them or 2 GTX1080Ti cards should cost about £1500 and return over £200 in profit every month and if buying lot of parts probably land a decent discount as well. Obviously there is a lot of risk involved and uncertainty but I could get £15k loan for 4 years paying around £330 a month, make 10 rigs and get over £2k/month from mining so theoretically I could quit my day job ( or night job as it may be in my case). I had a £20k loan for 4 years which I took out to pay deposit for house and it was not too tight paying it back so even if it all goes down south I will be able to afford to pay off loan based on past experience. And in any way kit will be at least worth 50% of original price if it did not work out and I had to pack up mining. So it seems like risk might be well worthwhile. At 10kW+ it would provide enough heating for the house as well making additional savings just need to figure out how to distribute it around house without noise. Our house used to have hot air heating in the past (long before we moved in) and part of the channels are still in the place so that would be an option. I don't think I could go over 10kW which is 40A as I only have 60A supply to house and need to leave spare capacity to run other things so going beyond that would require supply upgrade or move to/rent other premises.

I am not filling in loan application just yet but definitely something to think about for long term and once I have proved I am actually getting money.

Had lots of similar thoughts and discussions with my customer (who I'm helping to build mining rigs for). In their case, they own a couple of large retail stores, the second one they purchased just a few years ago. When we did the maths, we worked out that a fraction of what they bought their second business for invested in mining could provide returns greater than both businesses put together. When you consider also that they estimate their second business won't be into profit for another 8-10 years, mining to them seems lucrative and relatively risk free by comparison. You do have to be realistic and consider the risks, although the same goes for any business venture.

I'm not sure I'd recommend getting a loan to by the hardware though. You may have difficulty getting a loan too if you're honest about its purpose. Perhaps you could scale up gradually instead, building something like 1 or 2 rigs a month. And rather than a loan, you could use a card and transfer the balance to a different card, one that gives interest free credit for a year or two, to give you chance to pay it off before you start paying interest.

And that's something else to consider: Should you use what you earn to live on or pay off loans, or should you re-invest? Bear in mind also that some places, like Aria PC accept Bitcoin payments so you can use what you earn to build more rigs rather than getting into debt. There's also the question of whether you should keep what you earn in cryptocurrencies, potentially adding to the risks, or convert it to fiat currency (ie sell it). Personally I think there's a much greater chance that prices of most of the established cryptocurrencies will continue to climb rather than fall to zero, but it's probably safest to hedge your bets by investing in a few different cryptocurrencies AND selling some of what you earn too.



This is something I posted in a similar discussion I was having on a tech forum a while ago in response to a "Ok, so what's the catch" type of question ...

Originally Posted by Me

There aren't any catches (hence the reason everywhere is presently sold out of most of the popular mining graphics cards) but, as with any business or investment, there are risks to consider when investing in mining hardware:

Long-term mining profitability:
There are a number of reasons it could become less profitable to mine, such as a fall in cryptocurrency prices, an increase in hardware prices or electricity costs, an increase in 'difficulty' or a decrease in mining 'rewards'. Mining rewards don't change too often and usually by the time they do the cryptocurrency's price has increased substantially to more than compensate for the change. Bitcoin's reward 'halvening' happens every 4 years. We had one a year ago, so the next halvening is in approximately 3 year's time. Difficulty is a self regulating mechanism that ensures that new blocks can't be found/mined too quickly. The more mining power that comes online, the harder it gets to mine. However, usually increases in difficulty go hand-in-hand with cryptocurrency price, in that the more difficult it gets to mine, the more the cryptocurrency becomes worth (due to scarcity and higher asking prices).

Long-term mining availability:
Not all coins can be mined (ie Proof Of Work). Some use Proof Of Stake (or even more innovative ideas like Proof Of Storage). Ethereum should be moving to Proof Of Stake in the near future and it's possible Bitcoin and others may eventually do the same, though considering how long it is taking to reach consensus on a fix for Bitcoin's scaling issue and that miner's hold most of the voting power, I think it's unlikely Bitcoin will become a non-mineable cryptocurrency any time soon. And there will probably always be some altcoin worth mining.

Hardware costs and depreciation:
Presently, popular mining graphics cards hold their prices very well, often selling used for as much (sometimes even more) than new cards. That of course could quickly change if it becomes impractical or unprofitable to mine for any reason. However, since the ROI is generally less than 3 months, the risk is probably minimal. Also any risk can be mitigated somewhat by using non-mining-specific hardware, such as graphics cards that are popular for gaming.

The 'bursting bubble':
Some media outlets like to predict a dramatic collapse in cryptocurrency value. These are usually the same ill-informed pro-establishment organisations that show their pitiful lack of understanding by likening Bitcoin to a Ponzi-scheme or predicting the death of Bitcoin (see the growing list of Bitcoin Obituaries published over the last 6 or 7 years -- does it remind you of anything?). If you follow cryptocurrency developments and the more factual news outlets, you'll see the immense growth and potential of a technology that is already very widespread yet only just getting started. However, if you prefer to err on the side of caution, you can of course minimise any risk of losing funds due to falling cryptocurrency prices by immediately exchanging anything earned into your local fiat currency. Considering the state of most of the world economies right now though, I think the wiser bet would be to maintain a diversified portfolio of a number of different cryptocurrencies (properly secured in your own offline wallet of course).


There are probably a few other 'risks' from a business plan point of view, but that's about all I can think of right now. Certainly if you view mining as a business venture (like my customer has), the risks are fewer than most other business ventures. And it would be hard to find another business investment that promises such a quick ROI.

Originally Posted by thebluewhale

I've been following this thread with interest so started researching. It looks promising but I found this:

Bitcoins per Block – Each time a mathematical problem is solved, a constant amount of Bitcoins are created. The number of Bitcoins generated per block starts at 50 and is halved every 210,000 blocks (about four years). The current number of Bitcoins awarded per block is 25. However soon enough the block halving will occur and the reward will be downgraded to only 12.5 Bitcoins.
Bitcoin Difficulty – Since the Bitcoin network is designed to produce a constant amount of Bitcoins every 10 minutes, the difficulty of solving the mathematical problems has to increase in order to adjust to the network’s Hash Rate increase. Basically this means that the more miners that join, the harder it gets to actually mine Bitcoins.


which to me looks as though from the next block halving you're on diminishing returns for the same processor/GPU power.


Or am I reading this wrong?

That's correct, except we're already at a 12.5 BTC reward. The 'halvening' happens approximately every 4 years. The last one was about a year ago so the next one is not until around June 2020: http://www.thehalvening.com/

Like ainarssems says though, the price of Bitcoin tends to increase as a result of any reduction in reward. That's not guaranteed of course but generally it obeys the laws of supply and demand. If it becomes less profitable to mine and miners stop mining as a result, less people are selling and the supply diminishes, driving up the price.

Originally Posted by Markr

Anyone looked at the price / performance of the GPU instances in AWS?

Certainly worth looking into but I think it's unlikely it would be profitable and it may even violate Amazon's T & Cs. I know that some of the Virtual/Cloud Server service providers who offer free trails, specifically forbid the use of their Virtual Servers for mining purposes.

[moltuae]

Another important point about Bitcoin and (and reminder NOT to hold Bitcoin, or any other large amounts of digital currency, on an exchange).

What To Do With Bitcoin Ahead Of SegWit Activation:
Article Link: https://cointelegraph.com/news/what-...wit-activation

We can expect a price dip at some point before/after this event due to panic/speculation. BUT, since this effectively resolves a lot of the issues that have been holding Bitcoin back, prices are likely to continue to rise following this.

Just to clarify the 'hard fork' situation: If a hard fork occurs and you have the private keys to your funds, you will own the same amount of Bitcoin on both blockchains. If the private key to your funds belongs to an exchange, the exchange will be in control of the outcome.

[thebluewhale]

From what I've read here and on the web I'm going to give it a punt .

Sooooo....

I'm going to build a GTX 1060 6GB rig because I can't get a decent AMD card anywhere and can't justify a 1080Ti just yet.

From the profitability calculator ROI is about 8 months so I've probably paid too much for stuff but like anything new it's a learning curve.

I've bought a card I can overclock so may experiment with that once it's up and running to try and up the hash rate.

It'll be built by the weekend so I'll let you know how it goes.

[ainarssems]

Lot's of good points a always. Getting loan is not a problem but credit cards are something to think about as well.

I've bought a card I can overclock so may experiment with that once it's up and running to try and up the hash rate.

I am still a newbie but it seems like it's best to underclock and undervolt GPU to save energy and overclock GPU RAM to get best results but there is usually not much room for GPU RAM overclocking

[ainarssems]

What kind of life do we expect from rigs/GPU's? I guess the rest of system could go on for 10 years but surely GPU's will get outdated sooner either because they will not support new algorithms or the performance will not be up there compared to new cards. Does 3-4 years sound reasonable?

[moltuae]

Originally Posted by ainarssems

I am still a newbie but it seems like it's best to underclock and undervolt GPU to save energy and overclock GPU RAM to get best results.

That's right. Most of the time you'll be under-clocking the cards for efficiency.

Originally Posted by ainarssems

What kind of life do we expect from rigs/GPU's? I guess the rest of system could go on for 10 years but surely GPU's will get outdated sooner either because they will not support new algorithms or the performance will not be up there compared to new cards. Does 3-4 years sound reasonable?

I think that's probably a reasonable estimate, especially for high-end cards. Cards like the 1080 Ti are likely to remain profitable for a while, even after something else faster and more efficient comes along. At that point you may be building more efficient rigs using newer cards but that's no reason to disconnect the old cards if they've long since achieved their ROI goal and are still at least marginally profitable.

I think also, if you're not driving the cards too hard or hot continuously -- which you probably won't be if you're looking for efficiency -- they should last a long time. In fact, in most cases, running continuously at a constant temperature, puts less strain on electronic components than power cycling or temperature variations does.




Oh, and back on the subject of risks, another important warning I should probably add, for anyone dabbling in mining: Take care not to burn your house down!

There's almost no risk of that happening if you're only experimenting with one or two lower power (< 150W) cards but, when you start building rigs of multiple high-power cards, be careful not to overload power cables. Bear in mind that PCIe/Graphics power cables are only rated to about 300W maximum. Make sure not to exceed that by sharing power cables/connectors between multiple cards. It would be wise to keep any experimental or newly-built rigs away from combustible materials too, at least until they have been thoroughly tested.

This was a photo my customer sent me one evening while he was experimenting building rigs himself at home. In this case, he had too many risers powered from a single SATA power cable, which ended in small flames and a living room full of smoke. No damage apart from the cable fortunately:

[moltuae]

Some interesting recent news/articles ...

Bitcoin Price Leads as Crypto Markets Complete Turnaround from Massacre Monday
https://www.cryptocoinsnews.com/bitc...weekend-slump/

South Korea to Soon Legalize Bitcoin and Ethereum, Protect Traders From Bubble Burst
https://cointelegraph.com/news/south...m-bubble-burst

It’s Official: Japan Has Eliminated Tax on Bitcoin, Rise in Trading Expected
https://cointelegraph.com/news/its-o...ading-expected

Goldman Sachs: Bitcoin Will Plunge Again Before Surging To $4,000
https://etfdailynews.com/2017/07/03/...rging-to-4000/

[moltuae]

Countdown to SegWit: These Are the Dates to Keep an Eye On

Article Link: https://bitcoinmagazine.com/articles...ates-keep-eye/

[MikkiJayne]