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Landlords Focus On The Electric Bill
The purpose of Bitcoin mining is to ensure the integrity of the publicly visible distributed transaction ledger (blockchain) without the existance of a central authority.  The Bitcoin protocol achieves this by requiring that miners complete of a proof of work computation which, at its essence, sends electrons through the gauntlet and in exchange the miner receives a cash award.
Never before has there been a cottage industry that simply monetizes electricity.  Mining consumes power in a manner in which it can nearly directly be converted  to cash.
All miners compete for a relatively fixed amount of bitcoins produced which are worth roughly $1.4 million each month using the current BTC/USD exchange rate of about $6.40 USD.
As a result of this competition, mining for profit is generally only viable in certain situations that are available only to certain individuals.  This situation specifically refers to those who either build massive operations and enjoy the resulting economy of scale or, increasingly so, to those who aren’t directly paying for the cost of electricity.
There haven’t been enough FGPAs for mining shipped yet to knock the GPU off its pedestal as the technology responsible for the vast majority of hashing that occurs today.
Other than the hobbyist-level mining that occurs, success at mining commercially has meant the procurement, deployment and administration of large amounts of GPU equipment.  Because of the noise, heat and physical accommodations necessary to support such a mining operation, only a relatively small number (perhaps in the low hundreds) of these operations exist.  An even fewer number are enjoying  the benefit where electricity is included in the lease agreement.
That is about to change.

The arrival of specialized hardware, such as the Bitforce single from Butterfly Labs (BFL) and Enterpoint’s Cairnsmore1 put out much less heat (each about the same as a light bulb) and noise so they are more suitable for use in a residential home-office setting or college dorm even.  Details on ASIC designs promised by BFL have not yet been released but they too might become suitable for use at your home office desk.
Faced with the competition from these more power-efficient methods, GPU mining has not been shutting down but instead has been shifting.  Mining operators paying for electricity at average or above average utility rates (e.g., $0.15 per kWh or higher) have been selling off their GPU equipment and buying FPGAs.  There is still a healthy market for this used GPU hardware from those operators whose electric costs are much lower and from those whose power consumption is included in their residential or commercial lease.
This in effect transfers much of the cost of mining to the landlords who receive none of the benefit except, perhaps, in the greater likelihood that the mining operator pays the rent on time.
Most landlords who include power in the rent only know power consumption levels for the entire property and not on a per-unit basis.  While smart meters provide landlords with the technical ability to do utility submetering, rent controls and housing regulations often prohibit the use of submetering.
Bitcoin mining has not even been discovered by most landlords as being a contributor to utility expenses so there aren’t even clauses in most residential lease agreements which prohibit consumption of power for non-residential purposes.
That doesn’t mean landlords are not taking action to lower their electric costs.  Sustainability consultants and regulators promote a green lease to landlords and building owners as a tool to help share the burden for improving energy efficiency with the aim of reducing consumption.
Because Bitcoin mining is a 24/7 operation, it can easily represent half or more of a residence’s power consumption.  It is only a matter of time before the landlords that have been unwittingly subsidizing these commercial endeavors notice an increase in power consumption and begin to investigate.
Before investing significant amounts in mining equipment those operators who rent and plan to take advantage of utilities being included might wish to review the lease documents to become aware of any “commercial use” exclusions.  Also they should be aware of the potential that a month-to-month lease could suddenly change where utility submetering or other cost transfer might be imposed.
As far as those who mine using GPUs and pay directly for the electricity themselves?  Unless the electric rate billed is well below the average rate, now might be a good time to start thinking of where a better home might be for those inefficient GPUs.
Previous Posts - Twitter: @BitcoinMiner

Landlords Focus On The Electric Bill

The purpose of Bitcoin mining is to ensure the integrity of the publicly visible distributed transaction ledger (blockchain) without the existance of a central authority.  The Bitcoin protocol achieves this by requiring that miners complete of a proof of work computation which, at its essence, sends electrons through the gauntlet and in exchange the miner receives a cash award.

Never before has there been a cottage industry that simply monetizes electricity.  Mining consumes power in a manner in which it can nearly directly be converted  to cash.

All miners compete for a relatively fixed amount of bitcoins produced which are worth roughly $1.4 million each month using the current BTC/USD exchange rate of about $6.40 USD.

As a result of this competition, mining for profit is generally only viable in certain situations that are available only to certain individuals.  This situation specifically refers to those who either build massive operations and enjoy the resulting economy of scale or, increasingly so, to those who aren’t directly paying for the cost of electricity.

There haven’t been enough FGPAs for mining shipped yet to knock the GPU off its pedestal as the technology responsible for the vast majority of hashing that occurs today.

Other than the hobbyist-level mining that occurs, success at mining commercially has meant the procurement, deployment and administration of large amounts of GPU equipment.  Because of the noise, heat and physical accommodations necessary to support such a mining operation, only a relatively small number (perhaps in the low hundreds) of these operations exist.  An even fewer number are enjoying  the benefit where electricity is included in the lease agreement.

That is about to change.

The arrival of specialized hardware, such as the Bitforce single from Butterfly Labs (BFL) and Enterpoint’s Cairnsmore1 put out much less heat (each about the same as a light bulb) and noise so they are more suitable for use in a residential home-office setting or college dorm even.  Details on ASIC designs promised by BFL have not yet been released but they too might become suitable for use at your home office desk.

Faced with the competition from these more power-efficient methods, GPU mining has not been shutting down but instead has been shifting.  Mining operators paying for electricity at average or above average utility rates (e.g., $0.15 per kWh or higher) have been selling off their GPU equipment and buying FPGAs.  There is still a healthy market for this used GPU hardware from those operators whose electric costs are much lower and from those whose power consumption is included in their residential or commercial lease.

This in effect transfers much of the cost of mining to the landlords who receive none of the benefit except, perhaps, in the greater likelihood that the mining operator pays the rent on time.

Most landlords who include power in the rent only know power consumption levels for the entire property and not on a per-unit basis.  While smart meters provide landlords with the technical ability to do utility submetering, rent controls and housing regulations often prohibit the use of submetering.

Bitcoin mining has not even been discovered by most landlords as being a contributor to utility expenses so there aren’t even clauses in most residential lease agreements which prohibit consumption of power for non-residential purposes.

That doesn’t mean landlords are not taking action to lower their electric costs.  Sustainability consultants and regulators promote a green lease to landlords and building owners as a tool to help share the burden for improving energy efficiency with the aim of reducing consumption.

Because Bitcoin mining is a 24/7 operation, it can easily represent half or more of a residence’s power consumption.  It is only a matter of time before the landlords that have been unwittingly subsidizing these commercial endeavors notice an increase in power consumption and begin to investigate.

Before investing significant amounts in mining equipment those operators who rent and plan to take advantage of utilities being included might wish to review the lease documents to become aware of any “commercial use” exclusions.  Also they should be aware of the potential that a month-to-month lease could suddenly change where utility submetering or other cost transfer might be imposed.

As far as those who mine using GPUs and pay directly for the electricity themselves?  Unless the electric rate billed is well below the average rate, now might be a good time to start thinking of where a better home might be for those inefficient GPUs.

Previous Posts - Twitter: @BitcoinMiner

Mining With GPUs - The Bitter End?
Though the recent rally in the exchange rates has caused mining profitability to rise to the highest level seen since February, many mining operators are planning for the future and liquidating their inefficient rigs, as shown in this post’s photo.
In less than six months, block 210,000 will be reached and with that event the block reward will drop by half, to the level of just 25 BTC.  Thus instead of 7,200 BTC targeted for issuance per-day, only 3,600 BTC per-day will go to those mining.
Because it can’t be known what the exchange rate and mining difficulty level will be at that point in time, mining operators are preparing by either switching over to more efficient mining equipment or are liquidating operations outright — oftentimes due to the higher capital requirements needed to acquire the modern forms of mining hardware (FPGA and ASIC).
But one mining operator’s pain is another’s gain.  Those operating where electric rates are a fraction of their competitor’s rates are still able to compete while mining with GPUs due to the comparatively lower cost of GPU hardware.  Lower cost, maybe, but they still aren’t cheap.  Even though the GPUs from this post’s photo are offered for sale as being used previously for mining (presumably for many months) they still have a relatively high market value compared to the price when they are purchased brand new.  The HD 6950s in this instance, are offered at only a 25% discount versus the current price from NewEgg.
The seller, in this instance, is not leaving mining but instead “restructuring” his mining operation to use far less power to be compatible with the operation’s new solar power source.  “I’m in a position to buy enough solar panels at an amazing price that I’ll never need to buy electricity again” writes forum member AmpEater.
So while there likely won’t be less GPU mining occurring in total, there will be a rotation of hashing equipment.  GPUs are being decommissioned where power is expensive and those same cards remain a valued commodity to those with access to power that is relatively cheap.
If the exchange rate continues to rise faster than the difficulty does, even with the block reward drop these mining operators using GPUs yet might come to find their strategy paying off handsomely.
Previous Posts - @BitcoinMiner

Mining With GPUs - The Bitter End?

Though the recent rally in the exchange rates has caused mining profitability to rise to the highest level seen since February, many mining operators are planning for the future and liquidating their inefficient rigs, as shown in this post’s photo.

In less than six months, block 210,000 will be reached and with that event the block reward will drop by half, to the level of just 25 BTC.  Thus instead of 7,200 BTC targeted for issuance per-day, only 3,600 BTC per-day will go to those mining.

Because it can’t be known what the exchange rate and mining difficulty level will be at that point in time, mining operators are preparing by either switching over to more efficient mining equipment or are liquidating operations outright — oftentimes due to the higher capital requirements needed to acquire the modern forms of mining hardware (FPGA and ASIC).

But one mining operator’s pain is another’s gain.  Those operating where electric rates are a fraction of their competitor’s rates are still able to compete while mining with GPUs due to the comparatively lower cost of GPU hardware.  Lower cost, maybe, but they still aren’t cheap.  Even though the GPUs from this post’s photo are offered for sale as being used previously for mining (presumably for many months) they still have a relatively high market value compared to the price when they are purchased brand new.  The HD 6950s in this instance, are offered at only a 25% discount versus the current price from NewEgg.

The seller, in this instance, is not leaving mining but instead “restructuring” his mining operation to use far less power to be compatible with the operation’s new solar power source.  “I’m in a position to buy enough solar panels at an amazing price that I’ll never need to buy electricity again” writes forum member AmpEater.

So while there likely won’t be less GPU mining occurring in total, there will be a rotation of hashing equipment.  GPUs are being decommissioned where power is expensive and those same cards remain a valued commodity to those with access to power that is relatively cheap.

If the exchange rate continues to rise faster than the difficulty does, even with the block reward drop these mining operators using GPUs yet might come to find their strategy paying off handsomely.

Previous Posts - @BitcoinMiner

QUAD FPGA (Cairnsmore1) - Bitcoin Mining Board Unboxing

Enterpoint Ltd (UK) has started shipping their Cairnsmore1 QUAD FPGA and BitcoinTalk forum user rampone provides video for his unboxing of his shipment.

While the production and delivery of the hardware is underway, the USB drivers, bitstreams (either Icarus’ or Enterpoint’s) and miner are just now nearing release.

"Our general target [is] to achieve performance levels of about 200 Mhash/s per array FPGA", writes Enterpoint’s yohan in a forum post with the latest status.  Thus the Cairnsmore1 QUAD FPGA is targeted to deliver around 800 Mhash/s.

These units can be arrayed into tower form, as pictured to the right, using stacking pillars (sold as an optional kit).  Another view shows a tower of Cairnsmore1s stacked ten high.  There are already mining operators ordering this many or more.


The Cairnsmore1 QUAD FPGA consists of 4 x Spartan(TM)-6 XC6SLX150 FPGAs. Power supplies are to be sourced by the customer locally.  Yohan won’t even guess at power consumption until testing at higher hashing rates can be performed.

At the current mining difficulty level of 1.58 million, the QUAD’s 800 Mhash/s will generate around 0.5 BTC per day (a little under $3 USD per day).  Until power consumption numbers are available, a rough guess is that electricity might cost $0.30 USD per day using the typical U.S. residential electric rate.

To give an indication of how massive the current capacity of the Bitcoin mining network, if all mining was only done with these QUADs the number needed would be close to 15,000 units.  To perform a “51% attack” a party would need to double the current capacity — something that would require nearly a $10 million investment in QUAD units.

This unit first was announced in April and pre-orders had been made for the entire initial production quantities (v1.1).  New pre-orders submitted today are for September delivery and will be v1.1 models as well.  The price per QUAD is $640 USD.

[Update: On June 23, 2012, Yohan from Enterpoint provided an updated message on his Cairnsmore1 forum thread.]

Previous Posts

Aluminum Open Air Bitcoin Rig Trays
Bitcoin user Rich Chomiczewski builds lightweight aluminum trays for elegantly housing all the components that go into a Bitcoin mining rig.  Rich posts on the BitcoinTalk forum as Spotswood.
With many mining rigs sporting multiple graphics cards, PCI-E extenders, custom airflow cooling methods and more causing bizarre looking frankenminer configurations, these trays will help allow everything to be properly arranged and mounted securely.
While this isn’t the only commercially available open-air alternative the need to keep plenty of space between cards requires PCI-E extenders, so most mining operators build a custom  chassis or repurpose some standard shelving into a makeshift rig.  These aluminum trays then are a slick alternative.
Sadly, bitcoins are not accepted for payment when ordering — PayPal only (Rich, what’s the deal with that?).
Previous Posts

Aluminum Open Air Bitcoin Rig Trays

Bitcoin user Rich Chomiczewski builds lightweight aluminum trays for elegantly housing all the components that go into a Bitcoin mining rig.  Rich posts on the BitcoinTalk forum as Spotswood.

With many mining rigs sporting multiple graphics cards, PCI-E extenders, custom airflow cooling methods and more causing bizarre looking frankenminer configurations, these trays will help allow everything to be properly arranged and mounted securely.

While this isn’t the only commercially available open-air alternative the need to keep plenty of space between cards requires PCI-E extenders, so most mining operators build a custom  chassis or repurpose some standard shelving into a makeshift rig.  These aluminum trays then are a slick alternative.

Sadly, bitcoins are not accepted for payment when ordering — PayPal only (Rich, what’s the deal with that?).

Previous Posts

Free Guide - Introduction to Bitcoin Mining
Available for download on CoinDL (@CoinDL) is a 30-page guide (eBook PDF).  Subtitled “A Guide for Gamers, Geeks and Everyone Else”, the eBook explains the background of mining, the tools used, and a few techniques that help get the most for your efforts.
Though the eBook is free, the author, David R. Sterry (founder of CoinDL), is requesting donations, as was stated in his forum post announcement of the eBook.  The proceeds will be used towards the purchase of an ISBN so that the additional marketing and sales channels.
Previous Posts

Free Guide - Introduction to Bitcoin Mining

Available for download on CoinDL (@CoinDL) is a 30-page guide (eBook PDF).  Subtitled “A Guide for Gamers, Geeks and Everyone Else”, the eBook explains the background of mining, the tools used, and a few techniques that help get the most for your efforts.

Though the eBook is free, the author, David R. Sterry (founder of CoinDL), is requesting donations, as was stated in his forum post announcement of the eBook.  The proceeds will be used towards the purchase of an ISBN so that the additional marketing and sales channels.

Previous Posts