Mining

If you are considering getting involved in bitcoin mining I would urge caution. According to estimates derived from analysing the blockchain it is currently costing more to mine a coin than its current market value. So anyone promising amazing returns is probably a liar, a fool or is using someone elses electricity.

Also I would like to refer you to a recent news article we posted here. Look at the mining rig they have set up. The little man no longer stands a chance of mining hardly anything when you consider that this is your competition and it is a race.

If you think I am wrong and know of a profitable method of mining. Please do enlighten me and I will gladly add your suggested link to this page.

However, lets assume that you either have money to burn or have a wonderful supply of free electricity. I would suggest that you joined a bitcoin mining pool where you can get a small share of the bitcoins they generated that is proportionate to the amount of effort that you put into mining that block.

A good example of this is the BTCGuild website. With relatively little effort you can begin mining bitcoins immediately. Mining with a standard PC or a tablet will only produce you a very small amount of bitcoins. However, with GPU mining and ASIC mining hardware you can achieve much better results. For example to demonstrate how few bitcoins you can generate using unspecialised hardware I decided to download a mining client for my windows surface 2 tablet and leave it running for 24 hours. I generated the awe inspiring amount of 0.00000241 BTC which translate to roughly 1/10th of a penny at current exchange rates. Lets hope bitcoins do go to $1,000,000 each. In which case my mining operating will actually have yielded an eye watering $2.41 in a 24 hour period.

In fairness my Windows RT tablet only generated a hash rate of 3.3 MH/s. Inexpensive USB mining hardware retailing for around £40 / $60 can yeild results of 100x this (335Mh/s). Please be aware that at current rates this is still only going to generate you $0.10 a day in bitcoins. Butterfly labs claims to be producing a 600Gh/s device for over $4,000 dollars. This is roughly 1800x the speed of one of the USB devices. Theoretically this would produce $180 per day in bitcoins.  However, If difficulty increases exponentially as it has done recently and bitcoin prices do not rise – this will further disincentivise people to mine coins. There is also an element of luck to the mining process, you could find you have good and bad days.

My conclusion is you are better off doing a days work and spending your wages on bitcoins in the hope they increase than attempting to profit from mining.

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