800 Giga Hash per second user just started mining at BTCGuild

http://mineforeman.com/2013/02/13/800-giga-hash-per-second-user-just-started-mining-at-btcguild/

by shocks • 13 years ago

30 49 13 years ago

mineforeman.com

shocks5• 13 years ago

http://www.btcguild.com/halloffame.php

Now at 1,211.06 GH/s... Wow. That's about $130,000 per month in the current market.

johnmurch• 13 years ago

With ASIC bitcoin miners starting to be released I wonder if this means we are close to peak in terms of making $$$ of mining.

Most likely not, but still crazy to see someone mining this much when the price of a BTC is $26+

steeve• 13 years ago

So what happens when all bitcoins are mined ?

mkr-hn6• 13 years ago

I'll be amazed if bitcoin is still around in 2140. Automation and home manufacturing are going to do some weird things to the economics all currencies depend on. We could end up with a barter system where we trade in manufactured goods and creative output instead of currency.

dfc5• 13 years ago

You think society is going to take a step back? How do you invest in a company in a barter based economy? To save time I'm stealing the following issues with a barter based economy from wikipedia.[1] How do you think home manufacturing and automation are going to mitigate these issues?

Need for presence of double coincidence of wants: For barter to occur between two people, both would need to have what the other wants.

Absence of common measure of value: In a monetary economy, money plays the role of a measure of value of all goods, so their values can be measured against each other; this role may be absent in a barter economy.

Indivisibility of certain goods: If a person wants to buy a certain amount of another's goods, but only has for payment one indivisible unit of another good which is worth more than what the person wants to obtain, a barter transaction cannot occur.

Lack of standards for deferred payments: This is related to the absence of a common measure of value, although if the debt is denominated in units of the good that will eventually be used in payment, it is not a problem.

Difficulty in storing wealth: If a society relies exclusively on perishable goods, storing wealth for the future may be impractical. However, some barter economies rely on durable goods like pigs or cattle for this purpose.

[1] http://en.wikipedia.org/wiki/Barter

icebraining2• 13 years ago

Miners will get the transaction fees: http://en.bitcoin.it/wiki/Transaction_fees

tomjen3• 13 years ago

(That won't happen for a while, no matter how many are mining.)

Basically you pay a small transaction fee and the miner gets that.

SlipperySlope6• 13 years ago

Each bitcoin transaction has an optional fee set by the party issuing the transaction. The miner, or mining pool, solving the block containing the new transaction is awarded the fee.

At the moment bitcoin mining is all about solving blocks from newly created bitcoins. When they are gone, then bitcoin mining will be all about collecting transaction fees.

gigantor• 13 years ago

At $3000/day 'revenue', can anyone chime in for the cost of electricity to run that rig assuming $0.10/kWh, not factoring in the initial investment of the hardware?

shocks5• 13 years ago

See SlipperySlope's excellent comment. :)

http://news.ycombinator.com/item?id=5213780

DoubleCluster• 13 years ago

I just found out about mining pools; interesting idea to spread the risk of not finding any bitcoins for a long time. Why would a user with such massive mining speed need this though? Wouldn't it be more efficient for him to bear the risk himself and earn a bit more?

SlipperySlope6• 13 years ago

At the moment you are correct. But pool mining software is very easy to configure and maintain, and anyway within a few months there will be many more rigs mining at this rate - and thus justifying using the pool.

When I was running mining rigs in 2011, I used BTCGuild as they had very reasonable fees.

shocks5• 13 years ago

He risks not finding a block at all, and wasting his early advantage.

This kind of mining won't last very long because soon more people will have ASICs and it will become much harder to compete.

wmf2• 13 years ago

He may be using the pool for bragging rights.

path411• 13 years ago

I would assume it's much easier to join a pool rather than create his own pool for his devices to use.

pdog• 13 years ago

A mining pool significantly lowers the volatility and yields a more consistent rate of return. The difference in expected return isn't much: an effective fee of approximately 1%.

SlipperySlope6• 13 years ago

Bottom line ...

"By the way, whoever user 67117 is they will be generating about 122.83 bitcoins a day at the rate of 800 GH/s, or $3,000 US Dollars at today’s rates."

Using the bitcoin mining hardware info at: https://en.bitcoin.it/wiki/Mining_hardware_comparison ,

... assuming that the miner is using the Avalon ASIC batch #1 device, the reported hash rate per device is 68,000 mega hashes per second - which is 500 times faster than an example AMD 5770 graphics card. The Avalon box uses 400 watts. 800 giga hash per second could be supplied by 11 Avalon ASIC devices. Total they would cost $14000 plus shipping from China.

Plugging this data into the bitcoin mining profitability calculator at: http://www.bitcoinx.com/profit/ , we get 122 bitcoins mined from the pool each day, at this moment valued at $26, for a total daily revenue of $3193. Only $15 worth of electricity is consumed at $0.15 kWh.

The mining hardware for this lucky miner pays for itself within a week.

More info about Avalon at: http://launch.avalon-asics.com/

As the owner of the BTCGuild mining pool said on his IRC channel, "welcome to the future"! Its obvious that graphic card based mining will not be profitable when ASIC mining rigs become common.

Lucky miners are those who invest first in disruptive technology rigs. Most miners are gambling that they can pay off their rigs before the technology changes.

Osmium• 13 years ago

Serious question: why would Avalon sell these things, rather than just mine Bitcoins themselves? at the very least, the cost of the device seems far too low at current Bitcoin conversation rates.

xhrpost2• 13 years ago

http://news.ycombinator.com/item?id=5142274

wmf2• 13 years ago

Discussed extensively two weeks ago: http://news.ycombinator.com/item?id=5142021

Summary: They probably didn't have the money to build anything, so they funded it using Kickstarter-like preorders.

shocks5• 13 years ago

The opportunity to make huge profits is closing (very fast). In fact, if you were to buy an ASIC miner now it wouldn't arrive until May and by then the bubble will have (mostly) popped.

The Avalon ASIC miners were pre-ordered which gave them enough cash to R&D and then produce them - but even if they had found cash somewhere else and made lots of miners for themselves it wouldn't be long until other people were selling ASIC miners and they were not so profitable. It's better for Avalon to make a name for themselves as a good place to get ASIC miners so they get all the business in the future.

I wouldn't be surprised if this user mining at 1.2 Thash/s is Avalon or one of the other ASIC manufacturers.

millerc• 13 years ago

Besides the reasons discussed elsewhere, I see many reasons:

- The device in itself disrupts the mining hardware market. Should they mine by themselves, others would take notice and make their own ASIC hardware. They're in a much better place if they position themselves as the standard supplier for mining hardware, at least in the long run.

- I would see this ROI collapse as soon as this catches on. The market will be flooded with bitcoins, their individual value will diminish, and the bounty will likely decrease compounding the decrease. History says that the return will eventually (and soon) decrease to match the cost. Assuming the hardware is fairly priced (which it seems, given the current low volume), I would say the money value of those 122.83 bitcoins will come down to the same money value you would get out of $14k invested elsewhere.

- Whoever is operating the rig for user 67117, he's doing a hell of a marketing job for Avalon, just by being there. Is there any other offer in the world that can deliver on the promise "Give me $14k and you get $3k a day"? Sounds like a short-term proposition, but there's surely a good amount of money to make while it lasts.

Tuna-Fish• 13 years ago

Asic economics dictate that the cost of making the masks needed for prodution is hundreds of thousands. Once you have the masks, the cost of making chips is ~$10k per wafer. Depending on the size of their chips (I don't know), you can build high tens to hundreds of chips per wafer.

They gathered the money for masks by selling the first batch. Now they own the masks, and they can make more of them relatively cheaply. I suspect that they are building their very own mining pool as we speak.

iwwr• 13 years ago

Looks like the "shovel & pickaxe trade" during any gold rush. There is some money to be made by the early adopters, little or no by the late comers and then a steady and good source for those offering services to the miners.

P.S. One problem these ASIC manufacturers have is not being able to shift a lot of BTC, the kind of which they would be hypothetically making by just mining themselves. Leave that matter to the miners to work out.

znowi• 13 years ago

In practice Avalon draws 620 Watts and runs at 66 GH/s [1].

And let me introduce a few points to consider for an inspired by your calculation soon-to-be miner :)

1. BFL [2] and whoever else is able to produce an ASIC system start shipping very soon. All this hash power will skyrocket the difficulty, eventually decreasing the profits to today's GPU levels.

2. Volatility of BTC varies greatly and can be anything in a few months term. As I recall, the first gold rush happened in 2011, when GPU miners appeared. BTC peaked at over $30 in June and was less than $5 by November.

3. If you order your system now, you will likely get it in May if not later. Pre-orders started last summer and they're still waiting.

Happy mining :)

[1] http://garzikrants.blogspot.com.es/2013/02/avalon-miner-powe... [2] http://www.butterflylabs.com/

xhrpost2• 13 years ago

Could this possibly cause a drop in exchange price for BTC? If this user bought a bunch of ASICs, he needs to make his money back which could mean selling a lot of coin on a regular basis. However, if most miners already sell, it shouldn't make a difference, may even cause an increase if he starts hoarding more after making a full return on investment.

Retric• 13 years ago

The overall rate of BTC production is basically fixed. If anything this is going to push some people to stop mining BTC.

yk• 13 years ago

In the short term and if the miner sells all of his BTC yes. But in the medium term, the difficulty will increase, the same amount of coins as always will be mined and the price should remain roughly constant. ( And in addition, if you want to move the market to 25.50 $/BTC, you need to sell about 3k BTC [1] at the moment.) So the market would not move much, even if all of these bitcoins are dumped in an instant.

[1]http://bitcoincharts.com/markets/mtgoxUSD_depth.html

notdrunkatall2• 13 years ago

So is this as simple as buying the hardware, installing a mining program on it, and letting it run?

mkr-hn6• 13 years ago

Yes. Bitcoin mining favors the already wealthy, but that's how most investments go.

SlipperySlope6• 13 years ago

Yes, and previously it was even simpler.

At first, bitcoins could be profitably mined using just your CPU. Back in July 2010, I solved two blocks by myself - there were no pools then - using my Linux development desktop.

Within a year, CPU mining was no longer profitable because gamers were re-purposing their AMI/AMD graphics cards for much more electricity-efficient mining. Again, all you had to due was to download software into an existing gaming rig.

notdrunkatall2• 13 years ago

If that's the case, do you have an avalon machine on the way?

cadab• 13 years ago

The graph shows the impact of this user. http://www.btcguild.com/pool_chart.php

shocks5• 13 years ago

Looks like the link has died. Here's the cached version.

http://webcache.googleusercontent.com/search?q=cache:fzkWVrs...

cs702• 13 years ago

The race for ever faster and cheaper Bitcoin-mining technology is eerily similar to the race for ever faster and cheaper gold-mining solutions during the Gold Rush of 1848-1855. During the early stages of the Gold Rush, gold miners would just pan for gold in rivers and streams. Then they organized themselves into larger teams and started using mining "cradles" and diverting river water into sluices. Then they developed modern hydraulic mining with high-pressure hoses. Towards the end of the 19th century they invented dredging technology for mining.[1]

Let's call this what it is: The Bitcoin Rush.

[1] http://en.wikipedia.org/wiki/California_Gold_Rush#Developmen...

800 Giga Hash per second user just started mining at BTCGuild

Related Stories