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Discussion => Security => Topic started by: thecatinthehat101 on July 12, 2013, 01:11 pm

Title: How to mine Bitcoin?
Post by: thecatinthehat101 on July 12, 2013, 01:11 pm
How do people mine Bitcoin? What is it exactly? What does it take money, time, expertises? How much money can you make mining it?
Title: Re: How to mine Bitcoin?
Post by: fiveotwo on July 12, 2013, 03:44 pm
The basics
- Bitcoins are made from solving a "problem" before anyone else. 
- The more powerful your setup the more chance you stand
- ~6x per hour a "block" is found and the reward given to one miner, this was 50btc, now it's 25btc, eventually it will be 12.5 etc.
- A block is used to store data about bitcoin transactions, this is why you have to wait for blocks to be found before you BTC gets to the road
- All bitcoin transaction fees go to the miner that accepts the transactions in blocks they find
- People join "Pools" to share the work and rewards with other miners for consistent income with less risk
- The effort to get get a bitcoin is based on how much solving power there is across all miners, to keep the 6 per hour average
- There is a finite amount of bitcoins that can ever be minted
- Bitcoins were found by the millions by earlier adopters, eg. Satoshi, Bitcoins creator found 1814400BTC at the start of bitcoins life with little effort

How to mine
You have a few options.  Originally you could use a run of the mill computer, then focus shifted to computers with strong GPUs, then dedicated systems with multiple GPUs, and now it's moving to ASICs, which processors created for the sole purpose of bitcoin creation efficiency.  You have to take into account the power costs, which with any less than a dedicated system or ASIC will probably outweigh power costs.
Let's say you have a PC with a nice GPU (https://en.bitcoin.it/wiki/Mining_hardware_comparison#Popular_Mining_Cards), and think it may be economical.  You'd need to have the bitcoin client installed (http://bitcoin.org/en/download), and mining software like guiminer (http://guiminer.org/).  Working them out is a long process and I won't go into that, google it if you're interested.  You have the option of mining to a pool, or mining solo (possibly meaning months/years between huge finds). 
Or you could spend into an ASIC, which are still in early days and look set to take over the scene.  Two popular options are Butterfly Labs (http://www.butterflylabs.com/) or Avalon ASICs (http://launch.avalon-asics.com/).  They're as close to plug and play as it gets I think, needing only a little configuration.  People have bought them and had them pay for themselves in under a week, but as more enter the market it becomes harder and harder.

Requirements
It's handy to have some tech know how, but you can pick it up if you read around long enough.  There's tutorials for everything even if they can be hard to follow.  The time is not too huge of an issue, once you've set it up all you might have to do is make sure it doesn't catch fire to anything (this has happened more than once by cramming high performance parts too closely without adequate cooling).  Cheap electricity helps, you'll need an ok internet connection, and space for noisy hot machines.  The best times to get in on things have passed I feel.

Income
Really hard to judge, since it's based on predictions, and there's a large chance people will come along with a bigger and better systems and push up the difficulty.  But you can make good guesses using the calculators online, like (http://tpbitcalc.appspot.com).  Here's one I made just now, showing what a $1250 invest may perform like (http://tpbitcalc.appspot.com/?difficulty=26162875.6826&hashrate=25000.00&exchangerate=94.53&bitcoinsperblock=25.00&rigcost=1249.00&powerconsumption=127.00&powercost=0.10&investmentperiod=355).  You can see it's making $50 of BTC a day, and pays for itself in just under a month.  The problem with this estimate is that as more people get in on this, the harder it is for each to make money (only 6 blocks are found per hour).

Footnote
I haven't read up on this much recently.  I didn't proofread it.  I may be wrong on any subset of information, if so I apologize. 

Title: Re: How to mine Bitcoin?
Post by: thecatinthehat101 on July 12, 2013, 04:21 pm
Wow okay I'm broke I don't think I have the resources to do that with my comp. Dam I just wish I had a way to make some god dam money I'm sick of being broke even if I have to work for it!

P.S Fuck Mcdonalds, Fuck Burger king