Bitcoin Mining for Beginners – Episode 5: ASIC Miners

Buying an ASIC Miner

I decided that, after two months of mining with repurposed PCs, it was time to try buying a dedicated ASIC miner for Bitcoin.  But just what is an ASIC miner, and why did I want one?

Well, I suppose we should start with just with a simple description of just what an ASIC is.  ASIC stands for “application-specific integrated circuit,” and it’s basically a device designed for one function.  In my case, this ASIC was used specifically for Bitcoin mining.  ASICs are limited to one particular application, and in the case of cryptocurrency mining, one specific protocol.

If you haven’t seen my previous episode in this series, please go check it out here.

 

Why ASIC Over GPU?

In the world of Bitcoin mining, miners have many options on how they want to mine.  A miner can use their CPU, an array of GPUs, or they can opt for an ASIC.  Every option has pros and cons, but typically Bitcoin miners opt for ASICs due to their efficiency and hashing power.  Some cryptocurrencies, such as Ethereum and Monero, cannot use ASIC devices due to the simple fact that ASICs don’t exist for their protocols.  The difference between ASIC, CPU, and GPU mining is broad enough of a topic to deserve its own write-up, so today we’re simply going to focus on my experiences with buying and deploying my first ASIC device.

 

Where to Buy?

After several days of research, I decided that I was going to opt into using an ASIC.  But that was only the first step.  I now needed to source a device from a reputable supplier, and I needed to put a good amount of money up front in order to make my purchase.

The concept of putting a lot of money into something I’ve never even heard of was a scary prospect, I must admit.  I believe in the blockchain, but I wasn’t willing to drop the roughly one thousand dollars I needed to spend to get my feet wet in the world of ASIC mining.  So I decided to look into an older generation miner for far less money to give myself an introduction to buying, configuring, and maintaining an ASIC miner.

What I’m about to tell you comes with a heavy disclaimer: do NOT spend more than you’re comfortable losing!  The world of cryptocurrency is rife with risks, shady sellers, and sight-unseen purchases.  As with any investment into cryptocurrency, one should always do their research, find the best source possible, and be ready to be patient.  Buying hardware for mining Bitcoin comes with many, many risks, and one should be as informed as possible.  One should also not spend more than they are able to lose.  I cannot stress this enough!

With the heavy disclaimer out of the way, let us soldier on.

After weeks of research, peer consultation, and shopping around, I decided to buy my first ASIC miner from eBay.  I settled on a Bitmain Antminer S3+ 450 GH/s ASIC device for $200 as my first investment.  Sure, its hash rate isn’t great, and it won’t make me amazing amounts of Bitcoin, but I was far more comfortable plunking down $200 on eBay than I was plunking down nearly a grand to prepay for a latest-gen ASIC from a distributor I’d never heard of.

 

ASIC by Bitmain

Bitmain Antminer S3+

Miner Has Arrived

Weeks later, after my order was placed and my item arrived, I began the process of configuring my ASIC.  It was fairly easy for me to configure, as I am an IT professional by trade.  However, user experiences may vary.

I was required to provide a power supply for my ASIC, as it didn’t come with one, and I decided on a Thermaltake 750 watt power supply that I sourced from my local Fry’s Electronics.  I also purchased some handy power supply manual switches from a seller on eBay because I didn’t like the idea of running a power supply 24/7 using a paperclip as a jumper.

ASIC Power Supply Switch

Power Supply Switch

With ASIC and power supply in-hand, I set about the process of configuration.  It was very straightforward – connect the power leads to the miner, connect the network cable, and power the device on.  I then had to use an IP scanner to locate the device on my network, as resetting the device to factor defaults reverts the network configuration to DHCP.

I thought I was ready to continue, but a slew of challenges still awaited me.

 

To Be Continued

As I found out, configuring used mining equipment not such an easy prospect.  My challenges were many.  Too many, as it turned out, for a single episode.  As such, we will pick back up next time.  We will continue diving into the world of buying second-hand mining equipment.  I will also share the trials and tribulations that come with the territory.

Look to this space for more adventures in Bitcoin!

Bitcoin Cash Bitcoin Crash

Bitcoin Cash Bitcoin Crash – Yes and No.

Last night was an interesting one for anyone in cryptocoin investing.   Some reports had Bitcoin cash Bitcoin crash as a result of suspected insider trading by Coinbase.  The basis of this accusation was Coinbase suddenly rolling out Bitccoin Cash (BCH) without any prior announcement.  What added fuel to this fire was the sudden surge in Bitcoin cash trading volume with a nearly simultaneous plunge in Bitcoin itself.

The morning after I am happy to report Bitcoin recovered nearly $1,000 of what was lost last night as Bitcoin Cash holds on the gains made last night – with the exception of a sudden and drastic plunge in price by nearly 50% only to bounce back quickly.  All told the reports of an epic Bitcoin Cash Bitcoin Crash are greatly exaggerated.

Both camps were out in force last night on Twitter, Reddit and various Facebook groups sounding off this recent turn of events in cryptocoin markets.  Things are already returning to normal and as the smoke clears and the dust settles it’s clear that while Bitcoin cash is here to stay and has carved out a market of its own, Bitcoin itself is still king of the hill.  With Coinbase adopting BCH it gains a valuable foothold even if there is a cloud of suspicion hanging over this sudden move.

Bitcoin Cash Bitcoin Crash

Coinbase had previously announced plans to roll out more coin trading possibilities next year which will squarely secure Coinbase’s leadership position as a cryptocoin exchange. For now, everyone is settling into the new reality of being able to trade BCH as well as BTC while accepting the fact that the great Bitcoin Cash Bitcoin Crash of 2017 really never happened.  Those cheering for a Bitcoin bubble are no doubt disappointed that their prediction of doom and gloom fell flat again.

As published here a couple of days ago, the price of Bitcoin (BTC) is a state of change right now but is definitely trending upward.

How to Buy Cryptocoin

How to Buy Cryptocoin is Easy.  Bitcoin? Ethereum? Litecoin? You name it.

With Bitcoin ablaze in the media and their close cousins Ethereum and Litecoin also mentioned often and prominently, it’s time for us to spell it out for you.  As I am a Bitcoin miner I don’t buy Bitcoin anymore, I help to create it and I am paid very handsomely for my Bitcoin mining operations.  But before I became a miner I had to do my research. A lot of it.  And one of the first things I learned is that how to buy cryptocoin is easy.

In my case I used Coinbase.  But you can just as easily use Blockchain or Xapo. From personal experience I recommend Coinbase because they are the epitome of this article – how to buy Bitcoin is easy.  My first time out I had an account set up and my first purchase made via debit card in less than five minutes.  They have a nifty vault feature which adds a second layer of security to your cryptocoin in that a hacker can’t simply gain access to your account and drain you dry; there is a 48 hour delay on all vault transfers.

how to buy cryptocoin

The question asked next most often is not “How to buy cryptocoin” but IF an investor should buy cryptocoin.  The answer is YES!

Or – more emphatically – HELL YEAH!

As Bitcoin wanders hither and yon between $17,000 and $20,000 (with an expected rise past 20K any time now) Ethereum has made tremendous gains of 10,000% (NOT A TYPO – TEN THOUSAND PERCENT) in the past year and Litecoin isn’t a lightweight either.  The only question to ask yourself is not IF you invest in cryptocoin but WHEN will will you stop missing out? Get on the bus and stake your claim to the capital gains cryptocurrency has shown us all year long.

HOW to buy cryptocoin is easy.  WHEN to buy cryptocoin is easy too — RIGHT NOW.  Do your own research and see all the 2018 cryptocurrency price forecasts for yourself.

Shorting Bitcoin Futures Not Happening

Shorting Bitcoin Futures Not Happening. Here’s Why.

According to Fox Business News today there’s very little action so far in shorting Bitcoin futures.  And on the scoreboard of Bitcoin futures the CME has posted nearly 1,000 more Bitcoin futures contracts than the CBOE did on their first day.   According to Fox Business News, Microsoft and Expedia among other major companies are now accepting Bitcoin for payments which is a whole other reason to explain why Shorting Bitcoin Futures isn’t happening.

For all of the talk of a Bitcoin bubble it’s very encouraging to see shorting Bitcoin futures not happening.  Why? Because if all of the Bitcoin critics truly believed there was a Bitcoin bubble – just as they said – then why isn’t there a lot of Bitcoin futures contracts shorting Bitcoin? It’s more than a little interesting that all of these critics — and the public at large — aren’t placing any Bitcoin futures bets on a Bitcoin bubble.

Shorting Bitcoin Futures

That’s why shorting Bitcoin futures isn’t happening; no one really believes there’s a Bitcoin bubble.  If all of those predictors of doomsday really believed what they said then the Bitcoin futures markets would be flooded with contracts shorting the price.  But there aren’t any.  When the public at large realizes this we see Bitcoin ballooning through that ethereal $20,000 ceiling straight through to $21,000 and beyond — which is the prevailing view among Bitcoin commentators.

With all of this doom and gloom on an imminent Bitcoin bubble why isn’t there any serious volume on shorting Bitcoin futures? Because no one seriously believes it.  At least not enough to put their money where their mouth is and execute a contract shorting Bitcoin futures.  If a burgeoning Bitcoin bubble is to be believed, where all the profiteers placing their contracts to short Bitcoin?  Anyone still sitting on the fence as to whether or not to invest in Bitcoin should take this absence of shorting activity as the best possible sign to proceed.

 

 

 

 

 

Bitcoin Pricing is a Ping Pong Ball

Bitcoin Pricing is a Ping Pong Ball – The Charts Give the Proof

On December 16th Bitcoin broke through the $19,000 mark and was hovering just under $20,000.  We were holding off on an article as we naturally assumed Bitcoin hit $20,000 at which point we would’ve published new Bitcoin news.  It’s been getting a little tiresome publishing almost daily Bitcoin pricing articles.  Imagine our surprise to lean that Bitcoin pricing is a ping pong ball.  It bounced up and down and around $20,000 all the next day.

Then more proof that Bitcoin pricing is a ping pong ball the next two days — BTC bounced up and down between the 18s and 19s over the weekend.  This morning we saw Bitcoin at $19,100 then bopping up and down to a current price of $18,600 as I write this article.

Bitcoin Pricing is a Ping Pong Ball

I find these price fluctuations surprising as CME Bitcoin Futures hit the markets yesterday and TD Ameritrade’s own Bitcoin futures trading launched today.  If anything, all of these positive adoptions of Bitcoin to the broader markets should have boosted Bitcoin well past $20,000 and beyond at this point.  My thinking is echoed by Thomas Peterffy who appeared on CNBC this morning.

Bitcoin Pricing is a Ping Pong Ball should be a thing of the past at this point considering that more merchants than ever accept Bitcoin for payment both in brick-and-mortar stores as well as online sellers.  On top of that, Bitcoin ATM machines are rolling out across North America and Europe at a rapid pace.  All of this points to Bitcoin’s rightful place in the global economy as one among accepted currencies.  Within five years I foresee cryptocurrency having little if any distinction over fiat money.  The future of money is unfolding at this moment and Bitcoin is paving the way.  It’s safe to say that the ping pong ball of cryptocoin should stop bouncing up and down and going back and forth.  Fortunately, Bitcoin price fluctuations are much less dramatic compared to the last time I wrote about this.

Avalon 761 Bitcoin Miner Unveiled

Avalon 761 Bitcoin Miner Unveiled – Canaan Comes Through Again

With the Avalon 761 Bitcoin Miner Unveiled I must confess to putting myself on the waiting list.  I’ve been Bitcoin mining on nothing but Avalon miners and I am a fan for life.  First I bought an Avalon 721.  Then two 741s.  Now I’m ready for a 761.  Canaan sent out an email some weeks back announcing the A8 (now officially known as the 761(?) or maybe the 821 – see below) promising higher hashrates and better power efficiency.

And Canaan did it.  I just saw the Avalon 761 Bitcoin Miner in any official way on Blokforge last night- an official Canaan distributor – and the specs are impressive.  The model display boasts 8.8 TH/s with a top rate of 9.5 TH/s.  From experience, Avalon Bitcoin miners usually exceed their published specs and I am sure the Avalon 761 Bitcoin Miner won’t disappoint.  My Avalon 721 consistently delivers 7 TH/S (published rate 6.1) and my 741s frequently top out at 8 TH/s (published rate 7.3)

The Avalon 761 Bitcoin Miner shown on Blokforge boasts built-in power supplies.  My reaction to this news in one word; NICE! However, the Avalon 761 listed is for the Chinese market so there’s no way to know yet if the upcoming Avalon miner destined for other parts of the world will have the same feature.  There are no actual pictures of an Avalon 761 but as soon as we get some we’ll be sure to share them.

So that nobody thinks I’m an Avalon fanboy I have one complaint about Avalon miners; the increasing price.  I purchased my two 741s for $798 each plus shipping just two months ago.  Canaan now lists the 741 for $1050.  Blockforge $1200.  The Avalon 761 is listing for $1400 which is almost double the original price of the 741 for an increase of hashrate of roughly 25%. If there’s now an onboard power supply then the Avalon 761 will be a good value.

There’s also an AvalonMiner 821 listed on Canaan’s website but there are no published specs or price at this time. As I covered earlier, Bitcoin mining costs are simple to calculate and impossible to ignore.  It’s looking like the Avalon 761 will be impossible to ignore.

Calculating Bitcoin Mining Profits

Calculating Bitcoin Mining Profits is Easy.  Hardware+Electricity=Costs. The Rest You Keep.

Now for the secret to calculating Bitcoin mining profits — run a Bitcoin mining operation where electricity is cheap.

Calculating Bitcoin Mining Profits

In 2015 I had no way of knowing that relocating to Nevada from New Jersey would be so profitable.  My reasons then stand sound today; no state income tax, fantastic weather, fantastic housing at lower costs, the best food found anywhere on earth among many other reasons.  In the ancient history dating back to June 2015 I say in all honesty that Bitcoin mining wasn’t even a twinkle in my eye.  I’d heard of Bitcoin in passing but never gave it a second thought.  With insight akin to a Jedi who is not always sure of what’s next but almost always sure it’ll turn out for the better I moved to Nevada.

I might be a Jedi.  It turns out that Nevada has one of the lowest electricity costs in the United States.  And when it comes to calculating Bitcoin mining profits the cost of electricity is the biggest factor of them all.  That’s because there is no other cost of any consequence aside from acquiring Bitcoin mining hardware itself.  Here’s how much it costs to mine Bitcoin on a state by state basis.

Regardless of whether you call it fate or fortune or blind luck, Nevada is one of the best states for a healthy bottom line when calculating Bitcoin mining profits.  Looking at the map of the Continental United States its no small wonder why John McAfee chose Washington State for his company’s own mining operations.  They’re on the map too when it comes to lowest electricity rates and that’s what makes calculating Bitcoin mining profits easy AND enjoyable.

The “fun” part of Bitcoin mining can be found in the premier article we launched CryptoCapers.Com with.  Our other mining articles will provide endless hours of entertainment and education as well.

Bright Bitcoin Futures

Bright Bitcoin Futures Made Brighter.

Everyone is expecting the CME Bitcoin Futures roll out this coming Sunday. What no one saw coming was TD Ameritrade making bright bitcoin futures even brighter.  As Bitcoin speculation runs wild from concerns of environmental impact to a theoretical Bitcoin bubble to people getting rich or going broke, the overall outlook points to Bright Bitcoin Futures whether you exercise a Bitcoin futures contract or simply buy and hodl (yes, hodl) Bitcoin.

If there were any clearer indicator to the vision of bright Bitcoin futures we need look no further than the media itself.  When I entered the crowdfunding promotion industry in November 2013, crowdfunding was and indeed is an occasional buzzword.   The kind of news coverage we’re seeing points to cryptocoin being far larger than crowdfunding ever could hope to be.

When I first wrote about Bitcoin futures I couldn’t have known then how true my words would be.  With Bitcoin hovering in the $17,500 range for most of today and up 10% over the past seven days it’s not hard to imagine Bitcoin at $20,000 by Monday.

Consider some of the biggest players finance entering the Bitcoin world; first CBOE, then CME and now TD Ameritrade.  Then consider how an existing player like Coinbase has crashed repeatedly under the strain of tripling its client base in less than one year and the torrential volume of Bitcoin transactions all those new clients bring.

All of these indicators and more point in only one direction; bright bitcoin futures.  Regardless of whether you’re trading Bitcoin itself or working the Bitcoin futures market OR if you are a journalist covering Bitcoin it is an undeniable fact that Bitcoin is a power unto itself.

The smarter people in the crowd will realize the unique opportunity that has presented itself and jump on it armed with research and insight.