You say they are blues, these old miner's blues
Now I must have sharpened these picks that I use
Now I must have sharpened these picks that I use
-Carter Family, Coal Miner's Blues
Mining has always been a losing proposition, and, though the Harlan County metaphor might be a stretch, but, aside from the danger to life and limb faced by those lyrical Appalachian miners, it's not much different if you've been trying to get in on the game of mining Bitcoin.
Oh, what's a Bitcoin, you say? If you're here you should already have some idea, but it's more or less the most successful digital currency in history. Designed by a shadowy pseudonymous figure, pumped up by the failure of banks in Cyprus, and famously used (at least until recently) for the purchase of drugs, this sort-of-money is something of a digital-libertarian wunderkind. Its value has grown by a factor of several thousand in the past few years, and a few billion USD worth of the things seem to be around.
And how do you make it? By twiddling bits around, doing some sort of cryptographic magic -- "mining" in the parlance of those involved, using your GPU or a dedicated piece of hardware to compute a cryptographic hash of a certain sort. Right now, I'm sitting next to a piece of hardware that has "mined" a few bucks worth of coins in the last couple of days. Seems to good to be true, doesn't it?
Unfortunately, it is. In the past year or so, a number of entrepreneurs savvy in the ways of digital cryptocurrencies have tried to bring products to market, with varying levels of success. A friend and I had put down cash for an early ASIC bitcoin miner from a company which had previously built an FPGA. We eventually received a refund after the producer couldn't meet his ship dates and the project failed.
Butterfly Labs has almost suffered the same fate -- a quick search for "BFL ship date" or similar will lead you to some of the, um, even-tempered discussions out there. Here's an article that describes their issues somewhat if you're not up to wade through the ire yourself.
And yet, last week, just about six months after my order, I've actually received a piece of hardware from them.
Unfortunately, delays are a particular problem for a Bitcoin mining product. The difficulty of mining Bitcoin has increased geometrically, and the 'elbow' meaningful for my purchase seems to have happened in August-September. Had I received my unit in June, like this guy writing for Ars Technica, it would have been awesome -- I would have been in the black within a week or so. Unfortunately, according to most charts, I'm not going to make it into the black, even though my order was placed early(ish) and got a better price than what's currently offered. Projections are that I make about $50 this month, maybe $20 next, and then not much after that. I take a bath to the tune of about $200.
So, why am I sort of enjoying it?
Oh right. The device. It's actually quite nice -- packaging-wise, it showed up in a printed box, with everything you need to get going (a power supply and USB cable.) There was no printed manual, but who'd want one -- the included card with a link is sufficient.
The device itself is a nice little anodized box, about three inches each side -- about as close to a literal "black box" as you can get. Power and USB on one side, and a few vents. That's it. It's got a little red light on it that blinks when it sends a block. It makes a whirring noise like a laptop and is a bit warm.
Software wise, it's a different story. The world of mining software is pretty rough around the edges - I eventually grabbed MultiBit, a BitCoin wallet, and MacMiner, which is basically a GUI wrapper for several popular command-line mining programs, including BFGMiner and cgminer. I joined BTC Guild, the largest mining pool, punched in my info, and was up and running. I had to install some USB-serial drivers, which makes the experience about as polished as running a MakerBot Cupcake, i.e. not very.
Once it was up and running, the device has consistently outperformed its 7 GH/s rating, and it's really nice to have a little box printing virtual money for you.
OK, so we've already discussed how I'm basically going to take a bath on this. Furthermore, to go back to that mining profitability calculator, it seems like all currently shipping miners are basically not profitable. There are some announced products which might be profitable -- if they can make their announced ship dates. So...good luck with that.
Why are we still doing it then?
I have a couple of ideas. One is the "mouse on cocaine" scenario: we just keep pushing that lever, even in the face of diminishing returns. The other is that we feel compelled to make a futile gesture against ubiquitous surveillance -- after all that's a big part of what this experiment has been all about. Perhaps in some ways, the Bitcoin is the last vestige of the early, wild-west days of the internet, when we all dreamed about new communities, organized along different vectors than our old ones...of course what we got was smut, online shopping, and pictures of cats, but still, a good thought experiment.
And of course, we're all trying to recoup some of our investment while we can.
Oh right. Yeah. Is that the end of the story, run it for a month or two, make a few bucks back, turn it off still down a couple hundo?
Maybe not. There are some alternative cryptocurrencies out there, which you can mine a little faster. NameCoin, Litecoin, and Peercoin seem to be the biggest. Namecoin is mostly a distributed, censorship-resistant DNS scheme with funds also involved, and Litecoin doesn't work with the BFL miners, so I think I might try out Peercoin, which is basically an improved version of Bitcoin with a possible vulnerability patched.
Look out for a future update where I talk about my experiences with Peercoin -- with luck, I might just break even!