It was certainly a major problem, if you bought a new car but the dealer gave you one with 50k miles on it would you shrug it off if the gas mileage was still the same? At a basic level it's fraud.

There are practical concerns as well, these machines are usually pretty poor quality and the immense heat + poor cooling typically means the chips will burn out one-by-one over time. The PSUs are especially poor and will burn out and need replacing as well. Getting a used ASIC means these will be problems sooner.

Yeah, and people have bought pizza, too: http://uk.businessinsider.com/bitcoin-pizza-day-passes-2000-...

Cryptocurrencies are not always cheaper. They used to be but not anymore.

In Europe, I split a 0.36 Euro SEPA fee for a 1000 Euro transaction between two different banks in two different countries.

Bitcoin would have cost me $3-5 if not more.

The more people who mine the less valuable your mining hardware becomes, as the hash rate increase will lead to a difficulty update: it is a lottery that is designed to give payouts at evenly spaced time intervals.

You also now have a slightly old, very special purpose computer... it is like owning a three year old graphics card in a world where you decided graphics cards are not that interesting to own... what exactly are you "repurposing" it for? If it is some really awesome ASIC-based mining rig it might only be useful to mine Bitcoin.

But the more popular the coin becomes the harder it becomes to mine it. If the increase in mining difficulty (driven by total network hashrate) increases faster than the price of bitcoin then your mining apparatus becomes less and less profitable.

As for repurposing hardware, that might work with GPUs (although their value depreciates pretty quickly) but the Antminer is a custom ASIC, so it can't do a lot more than bruteforce SHA-256.

Better off with ISRG since January.

There's a price trap here. The good FPGAs still cost $10K or more each and if you're intending to ship that hardware, which is how the Bitcoin and Litecoin ASIC platforms bootstrapped themselves, you're going to be in trouble if your FPGA solution can't beat the equivalent spend on GPUs. Bitcoin lends itself to FPGA acceleration extremely well, SHA256 is trivial to implement in an absurdly parallel way. Scrypt is a bit more messy but not impossibly hard. The Ethereum one is a beast by design, so it'll be a true challenge for any implementor.

Ten R580 cards can really crank out hashes for Ethereum. For a GPU to keep up it's going to have serious memory bandwidth issues as that's one of the limiting factors in this brand of mining.

What you might see is someone getting a license to make "OEM video cards" and then produce a line of mining-optimized cards. Given the constrained supply across the board on any AMD GPU this would be an easy win for a company like MSI or Gigabyte that's already making GPUs. Strip off the useless ports, tune the memory bandwidth, and make them work over USB-C instead of PCI-e so you can really pack a system full of these things.

Making an external GPU that comes in a nice housing with USB-C interconnect would also sell well in the machine learning market where you wouldn't have to worry so much about shoe-horning GPUs in your case. You could just stuff them in a rack.

Flat fee for infinite power.

X/Infinity = ~0

Incidentally, 11K kWh is roughly the average energy consumption of a US household.

So given his current return, of 1.01 bitcoins, that means each 2.4 bitcoins mined use around the electricity that a US household does annually.

And people wonder why there are those of us who are concerned about the environmental impact...

I think commercial rates are generally lower than residential rates, right?

In this case, the server room location is Allen, Texas, likely paying commercial rates.

The source of the power is irrelevant: you could be selling that electricity to the grid, or offsetting the cost of your home's usage. Buying a solar panel may eliminate the middle man, but there's still lost opportunity cost.

I used to track where large bitcoin mines were.

Mostly they're concentrated around cheap hydroelectricity, with major mines in Labrador (2c/kwh), Central China (varies, but <4c/kwh), and Georgia (unknown, bitfury likely has a special deal with the local government). A few exceptions are Northern China (coal grid @ ~3c/kwh) and Iceland (geothermal @ maybe 5c/kwh, this isn't too clear either).

Solar panels are not effective for bitcoin mining, because hardware needs to run 24/7 (a shitload of batteries are needed) and the upfront cost is high.

It is very cost effective by those who don't pay for electricity directly. Plenty of older condo and apartment complexes do not meter individual customers. The electricity costs are a component of the condo fees. University housing is an example.

This is the #1 factor that pro miners look at. They pay between 0-3 c/kwh

The problem is that you have the difficulty going up, and the capital costs.

Track those three curves and you have a good sense of the window for profit.

The biggest mining operations are Chinese and Russian farms getting their power through questionably legal arrangements, so those statistics probably don't exist and wouldn't have much relevance if they did.