Getting into bitcoin

[wkronbaek]

Hey guys

I've been wanting to get into bitcoin for a couple of months but not really had the money for it

I've come to notice the Butterflylabs mining machines, and the "jalapeno" which supposedly does 5 Ghash/s and costs less than 300$ seems like something i'd be able to pay for

 

I have an old laptop i can hook it up to that runs at about 60W

 

Is it worth it to buy something like this, or should i aim for a desktop solution?

 

[FloRolf]

With a desktop miner you get around 600mh/s with the 400$ 7970. So this sounds really good.

[wkronbaek]

With a desktop miner you get around 600mh/s with the 400$ 7970. So this sounds really good.

Yeah it does

Only thing im noticing is that this only seem to run bitcoin mining while normally litecoin would be better. How much is differ in profit?

 

Also, wouldn't you actually be able to live off 2 of their 50 Ghash ones? Not that i have the capital for that but still

[ProGearUk]

Just to put it into perspective the people who ordered miners back in July last year have still not recieved them from Butterfly Labs. 

[wkronbaek]

Just to put it into perspective the people who ordered miners back in July last year have still not recieved them from Butterfly Labs. 

I know of that thing, but i've seen a couple of people making videos about know saying the finally got it? 

[ProGearUk]

I know of that thing, but i've seen a couple of people making videos about know saying the finally got it? 

This may be true but they probably were the first few to order and there is a massive waiting list. 

[wkronbaek]

This may be true but they probably were the first few to order and there is a massive waiting list. 

Sounds disappointing. 

Should i then believe their "Taking 2 months to ship, being shipped late april"?

[Andi]

Is it worth it to buy something like this, or should i aim for a desktop solution?

 you are way to late to the bitcoin game. the only way to make MAYBE some money are these RISCs from Butterfly Labs. But with european electricity prices it's possible it will never break even.

[wkronbaek]

 you are way to late to the bitcoin game. the only way to make MAYBE some money are these RISCs from Butterfly Labs. But with european electricity prices it's possible it will never break even.

The electric prices here are less than .10 usd/kwh...

[Andi]

The electric prices here are less than .10 usd/kwh...

 

 

in denmark? wooht? need a line over the border...we are approaching 0,40usd/kwh in germany.

 

Edit: i coudn't belive it and googled, the internet says only Denmark has higher prices than Germany...so how do you pay 0,1usd/kwh? :huh:

[ProGearUk]

I dont get capped on my power usage. Servers would run at work so no power fee

[ShearMe]

I ordered a Jalapeno unit from ButterFly Labs a few months ago (mostly out of curiosity and geeky desires) and still have not received it. They've had a bunch of problems bringing their product to market such as power draw issues with their first few platters of silicone, but it's not like it's easy to design your own processing chip. Most of their delays are the fault of other cheapo companies they've tried out for boxing/shipping/etc. They are/have signed contracts with more reputable services and so long as the first few test runs of boxing and shipping go over well they will start mass producing and shipping out preorders soon. 

 

Though many preorder customers are whining about delays (and more than a few conspiracy theories have spawned on the issue), you should NOT build a mining rig out of GPUs and expect to gain a profit. ASICs made for Bitcoin mining are so much more efficient that you'd be stupid to run anything else, even if you buy from another company making their own ASICs or FGPAs.

[wkronbaek]

in denmark? wooht? need a line over the border...we are approaching 0,40usd/kwh in germany.

 

Edit: i coudn't belive it and googled, the internet says only Denmark has higher prices than Germany...so how do you pay 0,1usd/kwh? :huh:

http://www.dongenergy.dk/privat/El/vores_elpriser/fastpris/Pages/fastpris.aspx

1 cent = 6 øre

[Andi]

http://www.dongenergy.dk/privat/El/vores_elpriser/fastpris/Pages/fastpris.aspx

1 cent = 6 øre

that's kinda cool..but how could that be so cheap? and why is nobody using this service? Even the 12kr you have to pay every month are something like 2cent/KWh extra.

 

but statistics say the rest of your nice little country doesn't know how to use the internet :D prices in eurocent

 

[MakeMebad1978]

I've read a small amount about bitcoin mining, its not something i'm going to consider bothering with. BUT, what i don't understand and that was never mentioned in anything i read is what exactly your pc is doing??? I understand folding helps universities work out various test data etc but no idea what in bitcoin your "mining", for all i know you could be getting payed to lend your pc processing power to corrupt people trying to crack a tough code to someplace important. This maybe a fairly silly question but i'm just curious.

[ShearMe]

I've read a small amount about bitcoin mining, its not something i'm going to consider bothering with. BUT, what i don't understand and that was never mentioned in anything i read is what exactly your pc is doing??? I understand folding helps universities work out various test data etc but no idea what in bitcoin your "mining", for all i know you could be getting payed to lend your pc processing power to corrupt people trying to crack a tough code to someplace important. This maybe a fairly silly question but i'm just curious.

 

All Bitcoin code is open source, so if you doubt that your computer is doing what everyone says it's doing you can read it for yourself/develop your own mining program.

From Wikipedia:

 

The mining process involves scanning for a value that when hashed twice with SHA-256, begins with a number of zero bits. While the average work required increases exponentially with the number of leading zero bits required, a hash can always be verified by executing a single round of double SHA-256.

For the Bitcoin timestamp network, a valid "proof-of-work" is found by incrementing a nonce until a value is found that gives the block's hash the required number of leading zero bits. Once the hashing has produced a valid result, the block cannot be changed without redoing the work. As later records or "blocks" are chained after it, the work to change the block would include redoing the work for each subsequent block.

To compensate for increasing hardware speed and varying interest in running nodes over time, the difficulty of finding a valid hash is adjusted roughly every 2 weeks. If blocks were generated too fast, the difficulty increases and more hashes are required to find a block and to generate new bitcoins. Majority consensus in Bitcoin is represented by the longest chain, which required the greatest amount of effort to produce it. If a majority of computing power is controlled by honest nodes, the honest chain will grow fastest and outpace any competing chains. To modify a past block, an attacker would have to redo the proof-of-work of that block and all blocks after it and then surpass the work of the honest nodes. The probability of a slower attacker catching up diminishes exponentially as subsequent blocks are added.

 

Basically, your computer crunches numbers by following an algorithm until it gets to a certain kind of number. The Bitcoin network then decides if this number was legitimately achieved and then awards the cruncher both a reward and the transaction fees associated with that number. Every once in awhile, the reward is reduced by half (eventually the reward will go down to zero) so in the future miners will only make bitcoins from mining so long as people pay the voluntary transaction fee.

With more miners, the algorithm is harder. With fewer miners, the algorithm is easy.

[wkronbaek]

that's kinda cool..but how could that be so cheap? and why is nobody using this service? Even the 12kr you have to pay every month are something like 2cent/KWh extra.

 

but statistics say the rest of your nice little country doesn't know how to use the internet :D prices in eurocent

 

well a lot of people live in apartments where they can't choose, but yeah people aren't really good at this kinda stuff here.

[MakeMebad1978]

All Bitcoin code is open source, so if you doubt that your computer is doing what everyone says it's doing you can read it for yourself/develop your own mining program.

From Wikipedia:

 

Basically, your computer crunches numbers by following an algorithm until it gets to a certain kind of number. The Bitcoin network then decides if this number was legitimately achieved and then awards the cruncher both a reward and the transaction fees associated with that number. Every once in awhile, the reward is reduced by half (eventually the reward will go down to zero) so in the future miners will only make bitcoins from mining so long as people pay the voluntary transaction fee.

With more miners, the algorithm is harder. With fewer miners, the algorithm is easy.

 

Thanks for the reply but non of that actually says what your pc is actually working out, seems to me its doing pointless searching for numbers that will then just be thrown away as they mean nothing, purely for the pursuit of earning money. Is there no main aim of mining other than to earn money, doesn't seem like its going to benefit anybody in the long run like hopefully folding does.

[RuecanOnRails]

Thanks for the reply but non of that actually says what your pc is actually working out, seems to me its doing pointless searching for numbers that will then just be thrown away as they mean nothing, purely for the pursuit of earning money. Is there no main aim of mining other than to earn money, doesn't seem like its going to benefit anybody in the long run like hopefully folding does.

 

 

What mining does is build the infrastructure which is bitcoin is based upon.

When you are mining what you are doing is creating a ledger of every trade, every transaction, every new wallet ID, even the total amount of coins in every wallet.

Without this constantly growing ledger that keeps track everything and prevents fraud, bitcoin could not be used for anything. When someone tries to double spend or falsify trades that information is put into the blockchain and once the next block is mined, it's checked and compared against the worldwide infrastructure to see if it's a legitimate transfer. Which is why you hear about a 51% attack, that means someone controls 51% of the entire network, with that ability they are able double spend and create fake trades as their 51% stake of the network is the one that determines if it's legit or not.

 

In order to keep people mining and keep the whole network alive the miners receive a reward for solving transaction blocks.

 

While at first glance mining may seems like a pointless waste of energy, it is building the infrastructure required for a non centralized global currency to exist.

 

 

At least it's something like that ;) you should spend some time looking into the background of how and why bitcoin works.

[BenDreadful]

Is there no main aim of mining other than to earn money, doesn't seem like its going to benefit anybody in the long run like hopefully folding does.

 

The only reason why people mine for bitcoins is to get money from it. If you want to help others, there's folding. None of these things will make you money while you help others with beneficial number crunching.

 

You can argue that you're helping with bitcoin mining like RuecanOnRails said, but that's a different kind of help. At least that's how I see it.

[Ribozyme]

Here is a nice graph what bitmining actually is.

[MakeMebad1978]

I like that diagramme Ribozyme.

Maybe folding should have started with some kind of reward scheme, even a small one would have been good. I'm thinking along the lines of like $1 for every work unit done. I used to do folding on both the pc and ps3 back when the ps3 came out, i didn't do it for long though as thought my parents would complain about the electric costs. Back then the pc took 28 days to do 1 unit and the ps3 8 hours

[BenDreadful]

money can make things go to all sorts of wrong directions.

 

folding is volunteering and it's best left at that since no one has any immediate gain from it. you can showoff your PPD and such, but the main point should be getting the work unit done and helping.

[Sklomp]

that's kinda cool..but how could that be so cheap? and why is nobody using this service? Even the 12kr you have to pay every month are something like 2cent/KWh extra.

 

but statistics say the rest of your nice little country doesn't know how to use the internet :D prices in eurocent

 

 

Well I pay €0.23/kwh so here it is kinda expensive but still cheaper then in germany apparently. Nice