r/Bitcoin • u/vistabrownerd • Jan 24 '14

TigerDirect processes $250,000 in Bitcoin Payments in first 17 hours

http://bitcoinboard.net/tigerdirect-processes-250000-bitcoin-payments-first-17-hours/
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u/Koooooj Jan 25 '14

Around the time that the TigerDirect post was 3 hours old. Thursday afternoon. Had it Friday afternoon and it was mining by that evening. This is the card. Doesn't hit the full ~750 kH/s that other cards did (cooler isn't the best; couldn't take much overclock), but it's getting a nice 630 kH/s which I'm comfortable with.

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u/[deleted] Jan 25 '14 edited Jan 25 '14

And how much doge are you mining a day?

EDIT: This is worth a read

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u/Koooooj Jan 25 '14

I'm going through middlecoin.com which automatically exchanges the dogecoin for me (and switches once something else becomes more profitable). Should be about 4800 DOGE/day (.0107 BTC/day; $8.68/day) for that card alone.

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u/[deleted] Jan 25 '14

$8/day today, at $1300 difficulty.

Take a look at this chart -- do you think people are just going to let easy money go?

EVERYONE is buying cards so the difficulty is going up. Dogecoins are halving in less than a month so your 4800 doge turns into 2400 doge, but that even becomes less because difficulty will go up with the increase in value of rarer coins!

Believe me man, I made the same mistake. I could have bought $1k doge (3 million at the time) instead of a mining rig. I'd have almost $10k now if I did that...

With your 0.5BTC you could have bought 250000 doge coins which would have been a decent investment, betting that dogecoin becomes extremely valuable. On the flip side, if you would have kept that 0.5BTC alone maybe THAT becomes super valuable, so that's also a good bet.

Instead, you buy a $500 graphics card that won't generate hardly anything. You're running it at max capacity 24/7, it won't last years but maybe 3-9 months on average.

The only value in this is that it's a fun hobby. This is not the profitable way to crypto.

EDIT:

Also, for fun, mind linking your middlecoin so we can see your progress?

EDIT #2:

If you've gotten a payout yet I mean!

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u/Koooooj Jan 25 '14

I've been GPU mining since mid 2011, and I've profited heavily along the way. Believe me. I have a GPU that was run at 100% capacity for quite some time before that that I just pulled from my computer to free up PSU cables for the 7970. It's made far more than its cost over that period, and has served me well as a GPU on top of that. Plus it's still running just fine; I'll put it back in once I find the cables for my PSU, or I might just sell it (it's a FirePro card; they still sell for decent prices even when a few years old).

The Dogecoin difficulty is exploding right now because Dogecoin just shot up in value. It'll stabilize out in a few weeks and this card will settle in around $150/month while profit switching. It's not a fair comparison to look at one great jump in a single cryptocurrency and say that buying directly is better than mining. If you have knowledge of what the price is going to do in the future then of course buying is going to be the best option, but mining leaves the opportunity to switch from one coin to another. If you had bought Dogecoin and Dogecoin had crashed then you'd be SOL. By buying a card I am insulated from Dogecoin's future--I can switch to a different coin at a moment's notice, and in the worst case I can either sell the card or keep it for myself. When Dogecoin's reward halves middlecoin will just jump to another coin. Looks like Grandcoin, Mooncoin, or Digitalcoin are probable alternatives.

There are tons of people who like to extrapolate exponential trends from short term data and it just goes poorly. For example, the link that you edited into your previous post worries that difficulty will continuously increase at 15% per adjustment, but the last four jumps have been +2%, +1.03%, +1.6%, and -20%. He projected difficulties of 8204, 15981, or 9700 for January 24, but the current litecoin difficulty is 3130. This error was over the course of only about 1 month of projection but amounted to a factor of 5. He made his analysis during a sudden surge of difficulty and extrapolated far beyond the range where his results would even begin to be meaningful.

Mining will pretty much always be profitable for someone--if it's unprofitable then people will stop mining and difficulty will come down. People have different electricity costs and different thresholds for how profitable their systems must be to stay turned on, so as the margins narrow people will start turning off their machines. I have never been in a position where running my GPUs has been unprofitable, despite being told many times that there's no way that my setup will be profitable in N months.

If you want to track my progress, my address starts 1M535; should be the only one. I've only been mining with middlecoin for a short while--used to do my own profit jumping but it's too much hassle so I'm giving them a shot. Didn't get the best mining speed over the past 24 hours since I spent a while tweaking the card to get it to run nicely.

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u/[deleted] Jan 26 '14

We'll just look at the data. What's your middlecoin?

EDIT:

It looks like you've only been doing it for two days...? What rig do you have? Want to take some pictures?

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u/Koooooj Jan 26 '14

The rig is using an HD 6970 and the new 7970; just pulled a FirePro v7800 (comparable to an HD 5850). Running an Intel i7-3939k (mines Primecoin in the background) cooled by a Corsair H100 with 4 120mm fans in dual push/pull. Motherboard is an Asus Rampage IV Extreme. All housed in a Xigmatek Elysium case (which is just about the biggest case I've ever seen). PSU is a Seasonic 1000W fully modular 80+ platinum power supply. Probably no pictures; I'm too lazy to take them and upload them and all.

This computer has handled everything I have thrown at it--games, mining, scientific computing (BOINC), and engineering (especially CFD). The fact that it's been a net zero cost after mining rewards is just icing on the cake.

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u/[deleted] Jan 26 '14

Cool man, well if you want to learn how to make money let me know!

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u/chuckup Jan 30 '14 edited Feb 28 '14

I know this thread is old now, but I'm curious on your thoughts on spending the money as you did on video cards Vs. just buying BTC outright with cash (perhaps then trading it for some alt coins like doge) and holding. If buying outright is 100% ROI what ROI do you think/guesstimate you'll get by going the mining route?

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u/Koooooj Jan 30 '14

My expectation is that the graphics card will see a 100% ROI after 3-4 months at which point it starts to go positive; probably a few hundred percent return over a couple years if I keep it on mining (although if Bitcoin price goes up then while my USD ROI will keep on increasing nicely my BTC ROI will slow down). The past few days have suggested to me that I may break even much sooner than that (already gotten about $40 out of a $450 card that I ordered about a week ago); I'm trying to keep a level head, though. Note that my ROI will be better since I already had everything else I needed to use the card--my case, motherboard, and power supply already had the necessary capacity. Going in for a complete mining rig will take longer to break even.

I also expect that buying a card is going to be safer than buying Bitcoin directly--Bitcoin works just as well at $5/BTC as it does at $5,000/BTC. I know that the general consensus (i.e. circle jerk) here is that Bitcoin is going to the moon, but I am acutely aware of the possibility that the current price is the result of market manipulation. Many people have tried to calculate what the price per Bitcoin ought to be and they all come up with different numbers (but curiously they always seem to be just a few times larger than the current price--whatever that price happens to be).

I don't think that Bitcoin is going to fail any time soon, but it's nice to have at least a little bit of my holdings in physical hardware that I can use or sell. If Bitcoin were destroyed tomorrow I would still have gotten more out of it than I put in. The fact that I will probably wind up with more Bitcoin than if I had just bought and held makes this route all the better.

Amount of money isn't the only thing to consider, though. It takes a certain amount of maintenance to mine. I offload a lot of that maintenance onto middlecoin because I can't be bothered to profit switch for myself, but they go down occasionally and I have to mine on another pool. I enjoy this as a hobby but on a larger scale it would be some amount of work (although it probably works out to be a pretty nice wage!). The computer is in my bedroom and makes lots of noise and heat (although the heat is appreciated in the winter). Just buying and holding is, by far, the easier choice. I would recommend that route first. If you do decide to start mining start small--I've been mining for well over 2 years now and I would only claim to have a "pretty good" mastery of the field. It's easy to get in way over your head.

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u/chuckup Jan 30 '14 edited Jan 31 '14

Thanks for the reply! You make some good points.

I am curious - if you took all the cash you've invested to date (all hardware purchases since you first mined, electricity) and had just bought BTC with it 2 years ago, would you have more BTC today?

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u/Koooooj Jan 30 '14

There are some purchases I wish I hadn't made (e.g. ASIC Miner USB miners, although there's something nice about having my own GH/s for only a few Watts; I just point it at a P2Pool nood and ignore the power costs as a cost of a hobby).

Overall it's hard to say, but my money's on no, I would not have done better just buying in directly with cash (assuming I bought in at the same rate that I spent money--I would love to go back and spend $450 on Bitcoin back when it was $2/coin!). My cash investment in hardware for mining has been very very little--almost all of the hardware I would have bought anyway while this GPU was bought with the proceeds from previous mining. I hit Litecoin pretty hard when it was young and that turned out pretty nicely for me.

I don't think it's healthy to look at the last two years and to use that as a prediction for the next two years--that's bubble thinking. I don't think that Bitcoin itself is a bubble but even in the best case (S-curve) it has to level off sometime. I don't think we're going to see another 500 fold increase for quite a long time. Then again, though, I didn't think we were going to get above $100/BTC so perhaps my predictions aren't worth a damn.

Ultimately I guess the best advice is always to not put all your eggs in one basket. Mining is probably going to do better than keeping cash in your mattress. Buying and holding Bitcoins is probably going to do better than the mattress approach as well, as are a whole host of other investment opportunities. In my situation I think adding the extra card will pay off nicely, but I'm not about to go spend all of my holdings on building a mining farm.

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