Seeing a tweet about Bitmain’s latest mining product, the Antminer R4, has me thinking about mining again for the first time in years.
I was bitten by the Bitcoin bug just as the exchange value was peaking for the first time in 2013 (~$260). Back then, for most people first learning about Bitcoin and cryptocurrency, making a go at mining seemed like a no-brainer -- who wouldn’t want to print their own digital money?
So like many other suckers I bought a few GPUs (what a pain). I also pre-ordered a Butterfly Labs machine, and waited, and waited (way longer than the continually-promised Two Weeks™). Long before the machine ever shipped, I sold the pre-order to someone else who was willing to accept the risk associated with it. I also pre-ordered one of KnC’s earliest products, their “Jupiter”. I had a better experience with that order and mined for a few months before selling it to another someone else who was willing to monitor the machine and accept the longer-term risk. And then there was the whole Yifu Guo debacle; I won’t go into the details but the entire saga is preserved forever on bitcointalk.
Sadly, that was the game back then. Bitcoin mining had elements of a gold rush to it with cagey suppliers demanding pre-order money before their product was even designed… Actually in most cases, before they were even sure their product could be designed. Aside from shady suppliers, one had to consider the network hash rate which seemed to be going vertical; no one knew necessarily when or at what difficulty it would level off. And then of course there were the issues of safely storing mined coins and the wild roller-coaster ride that has been the bitcoin exchange rate for the last few years -- no one really knew if or when a purchased miner would break even or provide ROI.
Its worth taking a look at where the above aspects of the Bitcoin ecosystem stand today (as I type this note in a Brave browser):
- Mining Suppliers: I can’t vouch for any individual mining supplier, but companies and products in the space seem to have matured (at least /r/Bitcoin and my Twitter feed aren’t littered with dissatisfied mining customers like they once were)
- Network Hashrate: Mining technology has essentially caught up with Moore’s Law, and with the Halvening behind us, currently the Bitcoin network hashrate seems to be driven by the bitcoin exchange rate more than any other factor
- Storage: The ecosystem has come a long way here; numerous hardware wallet options are able to store private keys much more securely and conveniently than was possible a few years ago
- Exchange Rate: While always a wild card, if you’re a Bitcoiner, you’re likely sitting on a few coins banking on the belief they will be worth more a year or two from now than they are today
However, even in light of all of this progress, Bitcoin still has a ways to go in the areas of privacy and scaling. Like many others in the bitcoin community, I’ve grown weary of the block size debate over the last year; the arguments have been more bitter and personal than neccesary at times. I’ve nonetheless been encouraged to recently see signs of the ice thawing and the larger community coalescing on new solutions and new directions.
This photo made me laugh out loud; it was great to see both of these guys together and showing their sense of humor:
I’d like to show my support for emerging solutions (as well as to support the overall health of the network), so after considering all of the above, I’ll probably be buying a miner. Maybe it will be an Antminer when they launch sales in a few days, or maybe I’ll keep reading and find something else that makes more sense. Some quick ROI calculations lead me to believe I will break even in a year or two; those coins would have been sitting in storage the whole time anyway.
My larger point is that this time I’ll be mining for the right reasons; not to get wildly rich overnight, but rather for the same reasons I run a full Bitcoin node: to participate in the network and have a small seat at the table like Satoshi would have wanted.
So that’s why I think every serious Bitcoiner should be mining again.
NB: The last thing I want to come out of this brief note is to be considered a shill for Antminer. I have no relationship with the company and have not been offered or provided any consideration for penning this. ‘Nuff said on that.
NB2: This is my first Medium post and I’d appreciate any thoughts; please feel free to tweet me or leave a comment below. Thanks!
