A Day in the Mines – Is it Still Profitable?

Hello all,

So, Bitcoin’s been around for some time now, we all know that. The concept of a currency without an asset to boot might seem foreign  to some. For example gold, physical gold, is tangible, is difficult to find, process and purify and it is this factored with the fact that there is a finite limit to the amount of gold in existence that makes it so special and a common go-to during times of crisis such as that in Greece currently.

Should their paper money become totally devalued, the markets all around the world will certainly quake and during times like that, gold stock prices shoot up during the panic as everyone is buying up gold.

Fortunately, there is a finite number of mineable bitcoins and once they are in existence, rewards for discovering the solution to a given block will be zero making mining obsolete as the only method of accruing more  bitcoins would be via transaction fees.

Well now that you’ve had a crash course in what Bitcoins are and how they’re worth, well, I’ll show you the market graph for the entirety of Bitcoins existence.

Following from the beginning, you’ll see that it was quickly established that one bitcoin would be worth roughly $134 US. This maintained for some time then in June of 2013 it crashed down to 67 USD per bitcoin. Partially due to the difficulty increases and the lack of profitable methods of mining bitcoins.

Then came the November 2013 skyrocket.

Between November and December of 2013, a single bitcoin’s worth increased from 130 USD to 1137 USD.

Imagine, having messed around a bit, accreted some bitcoin(s) and then this big bang occurs for its value. SELL SELL SELL

Many got out, many made a pretty penny but the market value couldn’t sustain this asset-less cypto currency someone thought up and was took up by the world.

Now a days a bitcoin will sit around 275-285 USD however over the past 30 days, its value has increased 100 dollars in about 30 days and is showing continuing signs of slowly growing. Experts believe it will eventually settle at around 581 USD per bitcoin.

Now the reason for this post isn’t to give you a brief history on my understanding of bitcoin but to as a question really. Is bitcoin mining still profitable?

The whole reason I got into things involving bitcoin boiled down to three things. A good deal locally on kijiji for a very weak, old and outdated but still operational miner made by Butterfly Labs. The Jalapeno which pumps out a whopping 8 gh/s. A sleek black metal box, with a port for power and a micro USB port.

Hook it up to your computer, give it enough power and let it whir away as it peaks at 8 g/hs and 55 degrees C. These days it won’t earn you much very quickly but I wanted it as a part of history. One of the first purpose driven hardware bitcoin miners made.

But then, eBay happened. Out of curiosity I hit up ebay.ca and checked for bitcoin miners and to my surprise, I was given a rather large list to sift through of devices that crunched numbers and pumped out bitcoins.

I saw terms that meant nothing to me at the time, like ASIC, MH/s, GH/s and eventually TH/s with increasingly large price tags slapped onto them.

So I did a bit of research and familiarized myself start to finish with what bitcoin is, was, where it was heading and what the hell do all these weird acronyms have to do with anything.

I came to the conclusion that this currency survived its crash, lives today and in certain circumstances, maintains profitability.

Intrigued I purchased what at the time looked like a decent starter machine. I had known it was a popular one and figured whats the worst that can happen?

I threw down 60 bucks for an old antminer S1, dual blades which left me with at an overclocked rate, 200 g/hs. Still not earning any big bucks but it was a cool little machine. I got an appropriate power supply after educating myself regarding amperage and voltage per rail and got mining.

Setup was simple and as the miner spun up to its 200 g/hs, I watched my mining pool account’s details come alive with scores and shares faster than any other time I’d seen it.

I was hooked. But that didn’t cover my third reason.

1. I wanted to be a part of history for sentimental reasons. So I got the Jalapeno.

2. I wanted to see what this was all about. So I got the Antminer S1

3. I don’t pay utilities at my current residence, or at least it’s included in monthly rent.

As a result this would potentially enable me to acquire several miners and set them to work via their USB or ethernet connections and actually potentially accrue some virtual wealth that maybe if I’m lucky, could one day become tangible cash in my pocket. A profit, maybe but in such a volatile situation I wasn’t really dreaming big.

The more math I did and hardware comparison occurred I realized that this wasn’t a hobby or something to do on the side. It was a whole honcho investment. That meant risk, losses, gains, market instability, speculation and hope. Sounds exciting…

 

So this is the current setup until Monday the 9th when the second Antminer S1 arrives from my Montreal seller from ebay. Between the two will sit the little Jalapeno, chugging away.

At this rate it’ll take 24/7 mining for 7.7 months to reach 1 bitcoin with estimated difficulty scaling. Not bad, I’m in no rush…but things can always move faster in the world of computing. But faster means more power, more power means more electricity but wait, that isn’t a problem. Perhaps this needs to be put on a faster track.

Stay tuned for another post about the exciting world of bitcoin mining!

LightSpeedTaco out