hi all, i'm currently looking for productive things i can do with my PC as stated here: http://www.ozbargain.com.au/node/104568
i just read about BitCoin mining, but i've never heard of BitCoin before. could someone explain how it works? how much A$ can you generate overnight with BitCoin mining?
thank you for any help!
A quick note on BitCoin mining is that right now with any standard computer you will hardly generate anything and it will cost you far more in electricity than what you will get return. You need specific low power hardware that will cost a bit in setup to get you going.
I suppose you could leave it running while torrenting or whatever.
If you have free electricity and a decent graphics card then go for it. Otherwise you're actually paying for the pleasure of having your computer burn through cycles.
Far better off buying bitcoins and trading them when the price is right, rather going through all that trouble to mine bitcoins.
Personally I`d never buy into them, since volatility is extreme and there are there is no logic behind hikes and dips.
If you can profit, then its all good, but the last person holding bitcoins will be the loser, in otherwords its a battle of the greatest fool.
the media and Government recognition is whats been making it explode. That's the logic behind it.
ok this is what i got back: Results:
Earnings ฿ $
Hourly 0.001435 0.188884
Daily 0.034429 4.533210
Weekly 0.241000 31.732470
Monthly 1.032857 135.996301
Annual 12.566429 1654.621663
Mining cost 0.008000 $/h
Net hourly profit 0.180884 $/h
Net daily profit 4.341210 $/day
Net weekly profit 30.39 $/week
Net monthly profit 130.24 $/month
Net Annual profit 1584.54 $/year
Break even after 138.0 days
Cost to generate 1฿ (with hardware cost) 54.59 $
Cost to generate 1฿ (without hardware cost) 5.58 $
฿ generated in Investment Period 12.22 ฿
Money generated in Investment Period 1609.29 $
Net profit in Investment Period 942.13 $
Time to generate one block 726.1 days
Blocks generated annually 0.503 blocks
i don't understand it? how much hardware do i need to be able to make a profit?
Last time I checked a few years ago, people would mine with seriously minimal hardware setups but with very high end stuff. Like, just a motherboard, average cpu and a very expensive GPU (the high end $900 radeons), and they'd set them all up to mine into one account - they would have rooms set up just for it with special cooling racks and everything. I'm talking 5-10 of these $1000+ machines all running at 100% 24/7. That's a lot of power. Power in Australia isn't cheap, either.
These days it's much harder to even mine 1 bitcoin, I doubt it's as profitable without ridiculous amounts of initial investment.
A single, high end computer will still not generate you anything worth your time or power bill, because bitcoins get progressively harder to mine.
Don't jump the gun. There are 2 sides to every story and bitcoin might not be as good as all the media is hyping it up to be. It is ridiculously unstable to say the least. You might just end up frustrated before you make a few bucks.
mining is at industrial level now and last I read a lot of those companies are losing money due to the increasing difficulty, despite the price rises.
Like the goldrush, the money makers are the ones selling the shovels…
The more of you that are mining bitcoins, the harder it will be for all. So either:
Suggest visiting bitcoin.it for more information and technical jive - if you aren't up with the times then don't bother trying your hand at mining bitcoins… perhaps litecoins is more valid? I had a go with bitcoins myself and was a waste of time for me… didnt have the hardware or budget to compete. But it is sometimes hard finding places in Australia to buy them…
be careful as your comp can overheat bad!
Broke $890 today! D:
Reiterating what plmko has said above:
If you can profit, then its all good, but the last person holding bitcoins will be the loser, in otherwords its a battle of the greatest fool.
It's a ponzi mate.
The bitcointalk forum has lots of threads about why it won't go mainstream and why it's basically a ponzi scheme due to the flaws in bitcoin.
It in no way is a Ponzi scheme. The limited availability of the currency and individual control over the assets make this not possible.
for all the beginner out there -
Bitcoin is a payment system just kinda like paypal
but you are trading "bitcoin" and not AUD or USD
it pretty much the same as walking around a shop with a block of gold , gold ring ( jewelry) and asking to trade it at a prawn shop for a new EG push bike or cash or new TV
how if every one making money with bitcoin ????
the payment system is like paypal or any other bank , ( you need to pay bank fees for transaction , and some computer system has to record it all the history , so every one know who the money is going to and who has what , where the money is going to ) ,,,,
SO every bank in the world has huge computer that process this , ( i guess that why we pay fees :P
Bitcoin is the same - but indeed of 1 big bank with 1 big computer in each city and atm machine, bitcoin get every day users to use their own computer to save and process all the transaction
because it such a big job , each computer only does a small bit and in return get paid for letting the system use their computer and electricity
rule of thumb …..
every day laptop runing 24/7 may earn $0.10 a day
High End gaming computer worth $2,000 may earn $0.30 a day
Very high END super computer that are big as a car may earn $100.00 a day
at the moment is it not profitable as your going to pay more for electrics
what your hearing on TV is ppl that did it 4 years ago when it was alot more easier ( not every man and their dog was doing it ) mite o earn t $1 a day on their laptop ……
but bitcoin use to be $1 ,,,,,,
4 years ago 30 day of mining would of paid them $30 ,,,,, 4 year later that $30 would now be worth $27,000
you could buy 1 bitcoin now for $1,000 just pray they hit $10,000 each in 10 years time :)
Note there are some special machine called :asic" which may cost you $1,000 and pay you $10 a day but as more ppl buy them the system get bigger and more computer power ….= less money later on …. so $10 a day this month will drop to $5 a day next month until you have a $1,000 paper weight (hopefully you earn enough to pay of your machine and a little bit of profit )
Bitcoin minning as a bussiness with $100,000 investment , computer admin running it , huge $20,0000 power bills per month only make about 30% …. avg joe blow with a avg computer wont get rich
if you want to try it your self for fun , buy a $15 ASIC call "block erupter" from ebay .. you will make $0.22 a day hopefully after 70 day running your computer 24/7 you will break even on your $15 investment ( that if your computer doesnt blow up from running hot)
I can't believe I'm even answering this question.
OZbargainers should be able to use a search engine and read wikipedia…
A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent or other investors, rather than from profit earned by the individual or organization running the operation.
Then you could have looked at past ponzi schemes including Tulip Mania. Recent ones include 12dailypro, Banners Brokers, Bitcoin, and Madoff.
The ponzi industry has moved from HYIPs providing "guaranteed returns" towards programs such as Banners Brokers, Madoff and Bitcoin. These programs only provide implicit returns but focus on returning money that is put in by others investors. It doesn't matter what the intention of the owner is when they create the program. If it can be used as a ponzi scheme, then it probably is. The original autosurf, some argue, was designed to share "advertising revenue" with the wider audience but it failed because it became ponzified. You can see the SEC papers where lawyers have argued this.
Madoff provided no explicit guarantees of returns and it was still a ponzi. Some ponzi schemes actually have a revenue stream but it was way too small such as 12dailypro from its autosurf component. Thus it paid returns to its investors from their own money or the money paid by subsequent or other investors. Newer schemes like Banners Brokers have a strong facade where it is almost impossible for the average joe to determine if it's a scam or not. The same applies with bitcoin.
The one big problem with bitcoin is that it doesn't generate any revenue whatsoever and there are more coins being mined all the time adding to supply. What we have learned from this experience is that QE nuts are wrong. On conspiracy theorist forums it is rumoured that bitcoin was a QE experiment run by an intelligence agency. That it was mainly to show that even with QE the price of USD could still rise. Nevertheless, although I don't believe in the conspiracy theory, I do believe it does in fact simulate QE and the tapering processing but sadly provides ponzi elements.
People always draw attention to the limited number of coins, but never look at the fact that it is QE all the time, for over 100 years… We won't be alive by then and bitcoin will most likely be superceded.
What is QE?
sorry but your a donkey - every one that call bitcoin a scam are just loser that are 4 year too late and wish they done it ….
at the end of the day it only trading one thing for another ….. in this case :bitcoin
i use to trade baseball card as a kid , my father trade antique furniture .
the idea is the same .
maybe you should google more , you gave a great explanation of " ponzi " but the way bitcoin work - not 1 person has all the power ( IE not one country , person , or bank )
next your going to say paypal is a scam when it the same thing a bitcoin……
Wrong billy.
Paypal is not a commodity.
Magic cards are a commodity. They retain value only if people accept them. Once the fad it over, it becomes worthless.
Price is set by bid/ask offer/acceptance. Prices aren't static. That creates the ponzi scheme.
Why do you think madoff said the biggest financial ponzi scheme is fiat itself. Creating more fiat (bitcoin) doesn't solve the problem. We need a proper commodity that retains value. Bitcoin is fiat.
for any one that doesn't know Paypal work the same way at bitcoin
you fund your account (credit card or bank) , you go shopping (ebay) or send money to another Paypal account, you ask paypal to withdraw your money back to your bank account.
yes i understand that Bitcoin can be use at silk Road to buy drugs , which i don't condone . But i am sure i could trade my watch to any drug deal to get the same thing.
Paypal first started out that "paypal Dollar" because in theory they are sending a IOU from one person to another , that is why paypal & ebay is instant payment , but i take 3 days to clear from your credit card.
Paypal (other Banks ie ANZ , CBA , NAB) have million of dollar in investment and infrastructure , (computer, Customer support, tv Ads)
that why you have to pay Shit loads of fees - which all go to the share holder or that company
Bitoin is the same - but it is peer to peer meaning that there Not one share holder , Not one person , any one can help
You can use computer to help record transaction ( mining) in which you get paid , you can help other in chat forums ( support)
there is also other payment : Visa-me from Visa has just started , Mastercard is also trying to build there own to compete with VISA , Amazon WebPay, Dwolla ( going to be the next paypal) Paydivvy and WePay
Finally point - the only reason why the above are approve = Government Control
bitcoin are "scam" is because they Dont pay tax, and their payment are anonymous
(lucky some place are now approving them )
it the the same as marijuana VS tobacco and alcohol
Tobacco has been proven to be more dangerous to health, BUT marijuana IS legal in some place because the government receives tax.
Bitcoin is certainly not the same thing as Paypal. With Paypal (and pretty much all the payment services you mentioned) you are sending the money from one account to another instantly and in most cases with no or limited currency conversion risk. Bitcoin can be used for this but where the very important difference lies is that Bitcoin is extremely volatile. Whilst it has pretty much doubled in value in the last 10 days, with nothing underpinning this increase in value it can fall back down again just as quickly.
If you purchase bitcoin now there is a risk it will be worth a fair bit less in the future and not necessarily the distant future. If you look at todays bitcoin value, from open it increased by 15% before dropping back down. If you send or receive a paypal payment now you know exactly what you are getting whereas with bitcoin if taking payments with it opens you to massive currency conversion risk.
As someone who recently bought BTC I would be happy to answer any questions. BTC is not a ponzi as it is backed by everday trades and all blockchains exist. No one ever claimed you'd get X% return.
I've been in two minds about bitcoin for a very long time. My biggest issue is what is the underlying asset behind it? Eg:
When you invest in shares, the underlying asset is a business that generates value.
When you invest in a term deposit, the bank takes your money and lends it out at higher rate generating value.
When you invest in gold bullion, you're acquiring a rare earth that has value which fluctuates with demand.
When you invest in government bonds, the government takes your money and uses it to grow it's income generating assets or funds programes that add value to society which society pays for via tax.
When you invest in bitcoins, what do you have? A hash code which entitles to me to a "coin" with no physical existence?
There is a growing part of me that believes it's only a matter of time before bitcoin bursts, but I also believe there is time to save it and turn it into something real.
It is no different to investing in cash, just another currency.
It is very different, cash issued by a government is backed by that governments physical assets (ie: gold). The more cash they issue without increasing their assets, the lower the value of said cash (see Zimbabwe).
cash issued by a government is backed by that governments physical assets (ie: gold)
This hasn't been the case for a very long time. The US stopped this in 1862. You are kidding yourself if you think that any other money is any more 'real' than Bitcoin.
hence a Government decision to "print" more money when ever they want.
Ask Pauline Hanson…
I'm not "kidding myself", gold was just an example, in reality there are a range of financial instruments/assets (& liabilities) used by governments but essentially each country has assets that are worth something and that country's cash reflects that.
Countries are businesses, they have assets and make profits or losses from their activities. Countries have a right to collect taxes, they have natural resources, they have a military, the list of "assets" with a real physical value goes on. To reiterate: there is value in a country and it's cash is simply the tool that represents that value.
What is the underlying asset when I purchase a bitcoin? What gives it it's value? I can see an argument for scarcity coupled with the fact they cost an increasing amount of money to mine, but there is no physical asset behind it. Unless I'm missing something here?
RE: Print Money Argument: Again see Zimbabwe… they printed money without having the assets to back it up. It made their money inflated which is why 1 AUD used to be worth like 6million ZWD but now the ZWD has been suspended indefinitely.
Most countries are in debt. They do NOT have the assets to pay for the currency they print. And there is NOT any such notion that they only print money if they have assets to support it. You are NOT entitled to cash in your AUD for a section of road or any other asset the government may have.
The only thing that the government backing gives you is retailer regulation to force the retailers to accept your money. Doesn't stop them from charging $1M for a slice of bread though, which is just as good as not accepting it.
Of course given that we were talking about investing in other currencies, the Australia government doesn't care at all about the 'value' of your USD unless you want to go to the US, and they aren't even going to promise you can get in, much less that your USD has any fixed value or use.
Also this is all subject to change. For example many European nations have swapped to the Euro and made their old currency not legal tender. They had planned transitions and phase out, but in theory there is nothing stopping a government from declairing that it's currency is officially invalid as of Right Now, and tough luck.
I think you are missing my point and it's going to take some economics lesson to understand it.
In any case no one so far has pointed out what the underlying value of a bitcoin is. I don't have the answer and I'm not saying I'm 100% correct, it's just that no-one has an answer for me and I'm not really interested in paying cash for something with no underlying value.
I'm not really interested in paying cash for something with no underlying value.
You're missing the point: Cash has no underlying value. Sure neither does BitCoin, but that doesn't make it different to cash.
This is where we differ in opinion then I guess. I believe cash has an underlying value, I don't see how it can't.
When you invest in bitcoins, what do you have? A hash code which entitles to me to a "coin" with no physical existence?
Well what happens when you decide to invest in USD? I don't see how this is a different concept.
What is the underlying asset when I purchase a bitcoin? What gives it it's value? I can see an argument for scarcity coupled with the fact they cost an increasing amount of money to mine, but there is no physical asset behind it. Unless I'm missing something here?
You don't purchase a bitcoin, much like you don't purchase a USD, it's not a physical asset. It is just a form of cash.
And what is cash if not a physical representation of an asset you own?
Originally coins were made from rare metals ie the US Dollar was originally "371 grains and 4 sixteenths part of a grain of pure or 416 grains (27.0 g) of standard silver". The US Dollar originally represented the amount of gold or silver you owned. It has evolved since then as currency now represents a range of assets. EG: If you have a bank account with USD in it, that bank has effectively taken your money and used it to invest in an asset (mortgage or other investment).
It's a bit more complicated than that but the principle is the same, there is an underlying asset behind cash. It represents another "asset" somewhere in the value chain.
You are entitled to your opinion based on what you believe. People around you are trying to tell you what the other side of the story is yet you are not budging from your ill informed opinion.
What people are highlighted to you are facts and help provide a basic summery of the monetary system yet you reply with outdated information that is you use to back your ill informed opinion. Your above comment proves this. You fail to see that your quote contains the word "orginally". Yes you are right about that but that was what "orginally" coins represented. It does not apply now.
Why have a discussion with the people around you when you seem to be closed minded about it all?
Bitcoin has no intrinsic value just like currency in this modern age. But its the demand and supply of currency that drives its value, and the acceptance of its use that drives its availability.
Bitcoin can go any way. It may bubble and lead to something that is worthless. But we won't know until time goes by. But you have to realise that you are witnessing the birth of something and if you choose not to partake it in then don't kick yourself if it does become something. And don't throw around your opinion based on what you don't know about. I am not trying to be rude but if you want to really learn about the monetary system there are plenty of good youtube videos explaining it and then you see that what you think of money and currency is not based a representation of an asset, but merely a form of guarantee to help facilitate trade (very very basic meaning).
Think of Bitcoin like Gold in the early days of gold trading and use.
Gold did not always have the value like it has now. There would be some point in time when gold was just like any other metal on earth. But people liked it. It has good chemical properties that makes it shiny and looks nice. So people started saying oh I like the gold you have I'll trade it for my horse. then it builds on that. You trade your sheep for my wheat or wait how about gold instead because I know the guy in the other town will trade gold for rice. Soon you have this trade thats happening and gold is involved because gold is becoming more acceptable to use because more and more people are accepting it.
Then you have people that see this and say hey if i got some gold, I can trade it with that guy with rice. How can i get some? Wait i can try and mine in from the ground. I dont have to do anything, just put some time and effort into mining and sooner or later Ill get gold. No one is mining that much gold at this time so there is plenty to be found. So sooner or later you have people mining for gold, using it to buy stuff at the same time other people are producing things and using that to trade gold and vice vesa. The miners are adding gold to the supply, and its making it harder to find more and more gold. The longer gold is mined, the higher amount of gold in circulation, the harder for it to mine, at the same time it use to trade becomes more and more accepted.
See you had something that has absolutely no value, but people of the minds of people, it became widely accepted to trade with it.
This is exactly what bitcoin is about. You are right that bitcoin would have had no value to start off with. but at one point in time it became more and more acceptable to use. for example, illicit drug dealers thought, instead of trading $$ for drugs, how about I trade it for this bitcoin (read up on its advantages) because the dealer on the other side said he would accept bitcoins instead of $$$. In fact he prefered to trade in bitcoins because it was better for him. This grows and grow and more and more dealers and users are trading bitcoin. Then a user goes, hang on instead of trading $$ for bitcoins then using the bitcoins to get drugs how about I mine bitcoins (because I can if I have the right things).
See the user mining the bitcoin is like the person mining gold. The user trading $$ for bitcoins is like the person trading sheep/wheat/rice for gold. Its because just like gold, the bitcoin was getting more accepted to use for trade. Add time to this and what bitcoin becomes is just like how gold use formed.
Sure bitcoin started off as being nothing but as soon as people place value in it and it becomes more accepted and used, it grows and grows. Who knows what will happen. It might collapse if no one starts accepting bitcoins. But just look around you. what do you see happening? Sure you see heaps and heaps of people mining now, but you also see more and more people accepting it. The only way this will collapse is when institutional make it illegal to accept. But how are they going to do that? You have a decentralise, unregulated currency (that is what bitcoin is). How are you going to say to everyone, well bitcoin is now worthless lets stop mining it and lets stop using it. It will only happen with massive government intervention and even that is going to difficult. The only thing I see stopping bitcoin is the emergence of other cytocurrency like litecoin, which may influence its overall value but even with that I already see a currency market for it just like the foreign exchange market.
I don't think at any point I was rude but if I was I apologize. For you to say that I don't know anything about the monetary system is pretty rich considering you have no idea who I am. The most annoying thing about your comment is that you recommend that I watch youtube videos to learn something about the monetary system which might say something about your expertise in economics. But anyway don't want to start (or continue) a fight…
I think its time to end this "friendly" discussion, I'm not going to reply anymore. You have your beliefs based on whatever and I have mine based on my studies, acquired evidence and experience in the economic industry. I can only agree that we disagree.
I've been following the bitcoin story from its inception and have been excited by it over the years. I will keep following it as I'm sure there will be something to learn as it matures.
I had a reply but when I pressed send, it didnt load. So anyway just wanted to apologise as well. I shouldn't have bagged you out because its true, I don't know who you are. And you are right, for me to quote "youtube videos" doesn't make me sound too much like a knowledgeable person. My point was just to show you another view of the system contrary to what you said. I just find it so interesting and the story I wrote just everything that was in my head.
Anyway its good that you have been following bitcoin since its inception. Its kind of exciting to be part the birth of something new. We weren't around when they started using gold to trade, so we couldn't make our wealth by mining gold. But we are part of the birth of bitcoin it if you saw things the way I saw things, how could you not take the opportunity to be apart of it! Its just crazy and interesting. But its a crazy and interesting world we live in!
No worries mate. I'm sure we'll learn a lot from bitcoin.
Good price crash today.
So many misleading comments by bitcoin speculators in this thread…
People making assumptions about other's opinions.
Strawman arguments…
Lost about 30% in value because of Chinese ban. http://www.bloomberg.com/news/2013-12-05/china-s-pboc-bans-f…
China has been the driving force behind a good portion of BTC's growth from 250->1000. And now that looks as if it's going to end. Not only are the Chinese pulling out, but this dumps on a lot of the speculation that Chinese companies were going to start accepting bitcoin - helping to legitimise its value. So far it hasn't crashed too far, and it's obviously unclear if it's going to continue, but this could be big.
If you had any currency at all for any reason, and were holding it longterm, you probably want to sell now and try to buy back in tomorrow or something. You won't lose much even if the price comes back up, but you could save a lot.
or maybe too late for this. …
One the other hand, LTC is quite volatile at the moment bouncing around.
https://www.weusecoins.com/en/