JamesM

They're incredibly expensive to mine.

Here's the antminer: Bitmain Antminer S9 14TH/s + PSU 180 days Warranty – Bit miner shop

$2400 plus HST upfront and then it'd cost about $197 a month to run full time in Ontario.

Now imagine you have multiple devices.

dave_j

The principle here, and one we should all observe, is to always be skeptical and never believe what you're told unless you trust the source or convince yourself that what you're being told is probably true.

In addition, never be afraid to alter your view if and when evidence suggests otherwise.

Shard

What does a device like this do?

Oakvillian

multiple devices is the start of it. Racks of 6 of these per shelf, stacked 4 shelves high in a frame, let's say 20 or so frames in a smallish datacentre. That's 480 units x $2500 to buy is over a million bucks just for the hardware, then another million or so per year for the hydro to run them ($200 x 480 units x 12 months). Plus paying somebody to maintain them, and for the building to put them in, and the additional hydro to run the a/c for the building... that's a lot of investment for a not-very-futureproof return, IMO.

Oakvillian

It performs the calculations that compute the algorithm that unlocks the bitcoin.

https://www.investopedia.com/tech/ho...n-mining-work/

It's not an effective way of doing anything unless you have many many of these things running simultaneously - the computing power needed to be the first to find the "hash" solution is effectively a brute-force problem so there is a natural tendency to escalate the hardware to ridiculous levels in order to "win the race" and be awarded the bitcoin.

Shakyuk

I can believe it, some of the rigs they use in Hong Kong and China are huge. The GPU is the most power hungry part of the system so multiple GPUs running at maximum capacity, I can believe they're using vast amounts of energy.

https://qz.com/1055126/photos-china-...bitcoin-mines/

Yorkiechef

So should bit coins be valued by the profit an electricity provider can generate from making them? A bit like electricity shares being valued by the earning per share?

Shard

Good article.

Aside from eventual government interference, and electricity costs, there's a clear diminishing returns spiral as more and more 'mining' capacity is added. Classic bubble.

Shard

I like the faux Stephen Hawking voiceover, nice touch, should sucker a few more people in. What an industry! Ultra rare tulips anyone?

dave_j

A very good aricle and one that explains why all the computing power is necessary. It also suggests, and I totally agree with it, that mining is like hitting your head with a hammer, it hurts. Best to sell the pills to ease the headache. The article suggests investing in AMD and the like, but with the value of bitcoin fluctuating so wildly on an hourly basis then surely the more acutely aware will invest in the currency itself and you can see it happening in real time at https://bitcointicker.co/. Fascinating really.

Shard

That isn't investing, that's trading.

JamesM

A Bitcoin is valued by what someone is prepared to pay for it unfortunately.

At the moment every man and his dog at my local Hooters is some sort of crypto expert.

I did read earlier of an ETF launching that will cover a spectrum of the bigger crypto "currencies".

Yorkiechef

My economics teacher was trying to explain money to the class, basically he said, money is what money does...money was a means of paying for things if it was accepted at the place where you intend carrying out a transaction, this included credit cards, shop cards, currency, gold or anything else that would be accepted as payment counted. Bitcoin was one of those recently that could be included in this, but since it has become highly speculative, it is no longer money In my view because you don't know when you receive your .0000157 of a bit coin for selling a coffee is worth the coffee you just sold. What I don't know is what charges are incurred if you tried to flog your minute fraction of a bit coin on to a dealer, would the cost make this transaction worthless? I think there are to many sales teams trying far too hard to make people believe that this is a legit commodity, that it is just too risky. Do I need to bring up the emperors new clothes again?

Yorkiechef

CES 2018: Kodak soars on KodakCoin and Bitcoin mining plans - BBC News

Now you can mine your own....I am flabbergasted

BristolUK

Mine your own business