Let’s Make Money!
I’ve just started mining bitcoin, and so should you!
It’s now one month since I un-boxed my Antminer R4 and put it to work, and it has earned me a total of 0,27 btc (ca. $170). It’s still a way to go to cover my investment of 3,15 btc, but it should be possible to do that in 1–1,5 years.
The early days..
Bitcoin originally started out with mining being done by each of the nodes participating in the peer-to-peer network. The difficulty was low so an ordinary pc (CPU) would do. As the network grew the difficulty gradually increased and an ordinary cpu would no longer be sufficient. GPUs were then used to increase the capacity. With the ever-increasing difficulty GPUs soon also went out of the Bitcoin business and ASICs (Application Specific Integrated Circuits).
Early days over
An ASIC is a one-trick pony — it can do just one thing, but it does this thing extremely. The ASIC used for Bitcoin mining is developed to calculate SHA256 hashes, and that’s the only task it can perform.
The introductioin of ASICs in Bitcoin mining marked the start of a development that saw a phenomenal increase in speed. The improvement can be measured in thousands of percents. However, slowly the ASIC development industry have approached the limits of ordinary circuit design, and the current 16 nm technology used in the Antminer R4 resembles the current limit found in other processors. What this means is that development in ASIC chips for Bitcoin mining will follow Moore’s law and we will typically see speed double every third year.
ASIC = Centralization
That also means that the “wild years” of ASIC development is over, and that we can predict the speed increase fairly well. The times when mining equipment was outdated almost the second it left the factory, is over. This has huge consequences for the mining business and the distribution of mining power. Centralizing of mining power, mostly to China, has been one of the serious concerns for Bitcoin’s future. Now the time has come where you can order mining equipment also from outside China and not be afraid that it is obsolete almost the moment you switch it on.
Bringing mining back home
Slowing down the development cycles of mining circuit means it is time also for people outside the manufacturing areas to invest in hardware for Bitcoin mining. This is very important for keeping a decentralized network which is necessary to guarantee the security of Bitcoin.
My goal is not to get rich on Bitcoin mining, but to help decentralize the mining power. If I can get my investment covered in 1–2 years I am satisfied.