There’s a gold rush going on these days, or a Bitcoin rush, at least. Driven by the, more and more people are learning about and becoming interested in the currency. While they could just buy Bitcoins at the current market rate, others are looking to try their luck at mining Bitcoins. And like prospectors who traveled west during the Gold Rush of the 19th century, many Bitcoin miners will find that they spend more on chasing the Bitcoin dream than they’ll ever hope to win back. As, Bitcoins are “mined” by unlocking blocks of data that “produce a particular pattern when the Bitcoin ‘hash’ algorithm is applied to the data.” It seems simple enough, but the cost of Bitcoin mining is greater than one might expect.

The more Bitcoins are mined, the more difficult it becomes to find the next block. Unless the miner is using the latest specially-designed mining rigs, the computers used often sport high-end graphics cards (since the GPUs are more efficient than CPUs for mining application). And running those computers requires a lot of power., which tracks Bitcoin-related data, estimates that miners are each day in their pursuit of new blocks of Bitcoins. That ends up costing about $150,000 in power costs each day to mine the currency.

[Hat tip to for reporting on the data.] That may sound like a lot, but miners on average are making money. According to Blockchain, miners are generating $470,000 in Bitcoin-related revenue per day. In fact, due to the recent interest in the virtual currency and its popularity, are close to record highs. While it might be easy to look at those numbers and think it’s NBD to just like, extract value out of thin air, Bitcoin mining isn’t as lucrative as it seems. Regular users hoping to use their regular computers to mine shouldn’t expect to just start making money by setting aside a few compute cycles to dig up Bitcoins. That’s generally reserved for special mining computers that do nothing BUT mine for Bitcoins using custom encryption processors. As Biggs, “While you could simply set a machine aside and have it run the algorithms endlessly, the energy cost and equipment deprecation will eventually cost more than the actual Bitcoins are worth.” That’s been confirmed by my colleague Matt Burns, who wrote in our internal message board that “after mining for a few days, the energy required to run my computer at full tilt was far greater than the Bitcoins I mined.” Even if you do choose to pool your resources to mine, it’s a fairly complicated process, even for tech-savvy users.

Check out the aforementioned article by Biggs for how he connected his. The alternative is to just designed to do nothing but mine for Bitcoins. Like any other investment, the return isn’t assured, and likely will be based on how Bitcoin market takes shape as time goes on. But right now, as with most gold rushes throughout history, it’s those who are supplying the miners that are finding the real riches.

Apr 12, 2013 Bitcoin Miners Are Racking Up $150,000 A Day In. The Gold Rush of the 19th century, many Bitcoin miners. In Bitcoin-related revenue per day. Author: Topic: How many bitcoins are you mining each day? (another pissing contest) (Read 22679 times).

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Please direct posts about exchange issues to the respective. Wordpress Bitcoin Cash BCH Miner there. Separate threads about exchange issues will be removed. Bitcoin Derivatives & Options • • • Bitcoin Market Data • • • • • [] Filter Posts Calendar Date Description More Info Feb 14 CBOE Feb Futures Last Trade - 20:45 UTC, Settlement Price - 21:00 UTC Feb 16 CFTC Hearing inc 'Cryptocurrency Regulation' Feb 23 CME Feb Futures Last Trade and Settlement Price - 16:00 UTC March 7 Next MtGox Creditor Meeting. Yes through my ongoing daily extensive research into every aspect of Bitcoin for my website: As the exchange rate of Bitcoin falls and mining difficulty increases exponentially, hardware is becoming obsolete more quickly, more electricity and other resources are required etc - so there is a compounding effect. Also USA based miners now have to pay capital gains tax which is another 20% + of profits. Of course it depends on where the miner is located. Cloud Hashing in Iceland for example is in a better position than most.

Mining is only marginally profitable right now - if the exchange rate falls further it will be unprofitable. True, but miners can also deduct the cost of mining from their taxes, depreciate their assets, etc. To mitigate the costs. Not saying that everything is perfect or that it isn't a pain in the ass, but it was only a matter of time before the tax man came for his share.

Anyone who thought he wouldn't was deluding themselves. As to the increasing cost of doing business, Bitcoin was designed to become more difficult to mine over time. Of course it requires more processing power (and thus, electricity) to mine as we move forward. And, in general, cost of goods (electricity) increases over time, especially when there is increased demand against a decreased supply.

This isn't exactly news. So in perspective, the algorithm adjusts to a target of 3600 coins a day (25 per 10 minutes) compared to the reality of 3925 coins yesterday.

Because the reality of quickly rising hash power, the actual total is often higher than target by nearly 10%. (3925 is about 9% above target) This isn't relevant really because the rate at which bitcoin is mined doesn't change over time. The amount of power needed to mine the same amount just keeps increasing.

This is the way the algorithm is designed to adjust to maintain a roughly consistent rate of production over time. So this number doesn't change meaningfully. Its basically a constant, so bitcoins mined daily isn't worth watching or discussing.