Saturday, February 1, 2014

Cryptocoin Reality: Is It Still Worth It?

Block Erupter Cubes, Antminer U1's, and a cheap booksize PC running Debian
150 Gigahash of creamy mining goodness
So a bunch of us got all weak in the knees recently over the idea of a meme turned into a currency...


Dogecoin (DOGE)
You can (I swear to God) buy shit with these


Yes, this has had the damaging effect on society you'd expect it would. Because of the wild success of Dogecoin, anything can become a coin now. Dogecoin legitimizes the concept of the "joke coin" because of how profitable it has been to make them.


Observe!



Arrogant Douchebag Coin (ADC)



This thing. Yes, this is real. 


You get the picture. So people are wildly interested. They keep hearing "but it's not profitable anymore". Which is true, with a caveat. It's not like it was in the golden days of Bitcoin (like, barely a year ago) when you could buy a little magic box and make 100 bucks a day. No, it's not that sweet anymore. But if you do it juuuuuust the right way.......



Tompool. My multipool of choice (clicky!)



Right now you can pay off hardware costs and start making straight profit in a 2-3 month window with a combination of switchpool mining, and currency trading. It is going to cost you up front though, and you'll still be risking the Government stepping in at any moment to turn your spendy mining hardware into so much loud useless junk with a single penstroke, and maybe seal team 6.  





With extensive testing (hello, I'm me) I have come up with one easy method for making coin mining profitable in 2014

Pile Making

1) ASIC mining, not Scrypt. This is important. It's possible to mine certain coins (scrypt) with video cards. The problem is, it ends up costing you twice as much in hardware and power to do what a single good ASIC device can do. That, and the coins are usually crap. Do not become a GPU mining addict. It only ends in tears. 

2) 40GH minimum to start. 40-45GH is good for about 10-12 bucks a day straight profit, and will cost you about 500 bucks right now (a cube and some Antminer U1's, or great deal on an old Butterfly Labs Single). The important thing is that GH (gigahash) total. Beware the gear being sold that does not state it. 

3) Mine anything BUT actual Bitcoin. That same hardware would make 4-7 dollars a day if you put it on Bitcoin mining, IF you were lucky. 

4) An Exchange. This is where you trade the coins you make for real Bitcoin. I use......


https://www.cryptsy.com (clicky!) 

Now, I'm not going into the particulars of setting up your hardware. That is an entire post on its own, and plenty of sites have done this. I'm just going to tell you how to use that hardware to make actual profit. Now let's explain multipool. 

What multipool is, and why it doesn't work

The concept of "multipool" or "switchpool" mining is that at any point in time, one coin is the most profitable to mine. This has to do with the fact that coins have "difficulty" that goes up and down to maintain the "mint rate" of them. So if a coin is worth about two bucks a piece, and suddenly some huge datacenter starts mining it like crazy, the difficulty to mine it will go up automatically so it isn't prematurely mined out. What this means for you is if you were mining that coin at the same time and getting ten an hour, now you might be lucky to get one a day. Thankfully we have coinwarz.

http://www.coinwarz.com/ (clicky!)

Coinwarz will tell you at a glance which coin is the most profitable to mine that moment based upon how much it is worth, and the current difficulty to mine it. Which is very handy indeed.


Multipool sites then provide one address you can point your miner at that will automatically switch to the most profitable coin to mine at that moment. Tompool does this. So does CoinEx. So does Multipool.us.

And it doesn't work. 

The reason it doesn't work is that coins change value so rapidly. In order for you to reap the benefit of that coin being valuable at that time, you'd have to be able to immediately sell them after mining them while they are still valuable. But it takes time to mine them, verify them, and transfer them to a coin exchange. Not going to happen.

So huge bummer right? Not really. What you end up with (if you are smart) is these constantly growing piles of all kinds of coins that are usually profitable at some time during the day. All you have to do is keep piling them up, then sell them when they are high. I actually use an app for this called Bitcoin Checker


Android Bitcoin Checker (clicky!)

but you don't really need anything that fancy. You can just look at a coin on Cryptsy. They keep value charts. Is it really high? Sell that stack! This is such an easy way to make double what you'd make mining Bitcoin. I've had days where I've tripled my mining earnings just being patient, and waiting for the 5PM EST price jump that happens when folks get off work and start trading coins. Let multipool pick the stacks you make but don't actually attempt to sell the coins you mine immediately. It's really that simple.

Hope This Help
Loveya

S