Minin Altcoins

Wow, 6 months have passed since I last posted here on Bitcoin Newsflash. Summer and other stuff happened that took my focus away from the world of cryptocurrencies. But now I’m back.

When I lasted posted, in March, I was still GPU mining. I was more or less at the break-even level, just converting electricity into Bitcoin with no profit. No matter what cgminer settings I tried in my XUbuntu powered mining rig, I couldn’t get more than 620Mh/s hashing power out of my Sapphire R9 280X video card. The price of electricity where I live is about 3 times that in the USA, so that just sucked any profitability out of mining.

My Litecoin Mining Rig

Sometime in May, I tried using different mining software. PiMP looked promising, but I just couldn’t get it to work. I found the developers to be unhelpful and they expected a level of technical expertise from their users that I didn’t have. So then I tried out BAMT 1.6. This was much easier to work with for noobs like me. And with it, my rig started mining at 815Mh/s, a 200Mh/s (33%) improvement on what XUbuntu could achieve.

Because of the rising alt-coin difficulties, the drops in value of alt-coins (especially the precipitous drop in Litecoin’s value) and the high price of local electricity, it wasn’t too long before the return to profitability that resulted from my rig’s performance boost was eaten away. So I shut down the rig permanently and it’s due to be re-tasked as a gaming machine whenever I get around to it.

The Arrival of ASIC Scrypt Miners

Gridseed Style ASIC Miner
Gridseed Style ASIC Scrypt Miner

The arrival of the ASIC Scrypt mining gear has also driven up coin difficulty and so, as with Bitcoin GPU mining last year, GPU mining of Altcoins has become largely unprofitable now. If you live on an area where electricity is cheap (US$0.10 or less per Kw/h), then GPU mining might still be profitable. But there’s a slew of ASIC miners about to delivered to customers in the coming weeks, so that will drive up difficulty and reduce profits again.

Investing in Bitcoin

Investing in BitcoinI toyed with buying Bitcoin for investment, especially when it dropped to about $400 per coin, but there’s no easy way to buy Bitcoin outright from here in Ireland. I tried SEPA transfers with BitStamp but none of them went through. Coinbase only accept fiat payments from US citizens so entry into the Bitcoin world from fiat currency is still a stumbling block. So I never bought any coins.

I’ve checked the price of Bitcoin periodically to see how it was doing and, overall, it’s been pretty stable this year. It has fluctuated between $400 and $600 but so far there’s no sign that it’s going to skyrocket in value like it did last year. It’s still a volatile commodity but with the support of large companies like Overstock and Dell and the demise of amateur institutions like Mt.Gox, it seems like the causes of volatility are being whittled away.

Back To Mining Contracts

So now I’m looking at taking out some mining contracts and mining in the cloud instead. There are so many variables involved in Alt-coin mining that it’s impossible to say if there’ll be any return on investment from a mining contract, let alone just recouping the cost. It’s a gamble. But then, dabbling with cryptocurrencies has always been a gamble. The manta has always been: “Don’t spend more than you can afford to lose.

In my next post I’ll talk about some of the mining contracts I’ve been considering signing up with.

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Filed under: Altcoin Mining