Australian Bitcoin mining probably not worth it

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blog You may recall that MacTalk founder and all-round geek Anthony Agius has been conducting something of an experiment to determine whether an Australian Bitcoin miner could make enough money to justify the practice. Well, the results are in: And the answer is: “Most likely not”. Agius’ conclusion (we recommend you click through to the whole, fascinating, post on his blog):

“Even with 20 rigs and rent, I’d make money for 5 months, but after that, would start losing it, and would never make enough in those 5 months to pay back the $28,000 I spent to buy the equipment, until I’d start to pay more for power than I would earn in Bitcoin. Regardless of how many machines you have, the cost of that machine and the power it takes to run it, will never make you back any money.”

The key to making money from Bitcoin mining in Australia, according to Agius, is to obtain a so-called “ASIC miner” — a CPU and chipset specialised for this kind of task. Most people use powerful graphics processing units from the likes of NVIDIA to get the task done, but according to Agius, the cost of such a setup in Australia means that locals probably won’t be able to make their expenses (electricity being a large one) back. It’s sad, but the Australian Bitcoin mining rush may be over — unless, of course, you can clandestinely subvert the resources of a major corporation to get the processing done. We can all dream.

Image credit: Chris Gordon, royalty free

6 COMMENTS

  1. Unfortunately for the early adopters there aren’t many places in Australia that take bitcoin directly. Though I am eying of some beef.

  2. unless, of course, you can clandestinely subvert the resources of a major corporation to get the processing done.

    I’m going to warn the Editor of Delimiter of this guy…..

  3. The Key to making money with bitcoin; is invest; and wait;

    During the recent bubble; the 8.4 coins I “mined” in the previous bubble (expenditure of 150 dollars to buy a graphics card; that I had an actual use for after the mining was done – but lets call that the “150 dollar cost”) plus the cost of the electricity (no more than 100 dollars worth in my case, though in this instance it was in a work machine).

    And; the current bubble; having expended no further resources could have (until the crash – which I don’t care about since I am doing this out of interest, not money making scheme) been cashed out for approximately 2000 dollars.

    So; overall; 350 dollar investment 2 years ago *could have* (as in I looked at the market; and for 2 days saw 200 dollars+ which means if I had been bothered I had the time to cash out at that price) resulted in over 2000, not a bad return. But obviously; a massive gamble.

    You cannot “live” off mining, and the future of bitcoin is actually going to stumble as a result.
    Why?
    The security of the system relies on a very large distributed computing network (ie miners). The larger the network the more secure.
    If you can control 50%+ of the computing power “mining”, you could subvert monetary transactions. (primarily, you could reverse them), by making your miners pretend those transactions never happened.
    Therefore; the more distributed and greater the power of the miners the more secure the whole bitcoin network.

    The stumble will come because right now; the “pay off” for the miners comes in 2 parts. A transaction fee, and the “minted bitcoins”. After a time; the minted bitcoins goes away, leaving miners reliant on transaction fees. These fees are unlikely to even come close to covering the expenditure in power and time that the miners will be putting in, the result will be dwindling resources put into mining; is an ultimately easier to “hack” currency.

  4. Electricity is expensive in Australia. In NSW the poles and wires are owned by government, and you have exactly one choice who you buy from (i.e. monopoly). You have massive choice when it comes to billing and debt collection, but still only one choice where you get your electricity from.

    The NSW government are intending to sell this public monopoly and make it a private monopoly. I doubt this will improve matters.

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