Only 520 days til a Bitcoin…At this Difficulty Level

I’ll write another time on the economics of Bitcoin speculation another time.  But after still another Fed meeting proudly announcing an indiscriminate printing of money, I fired up the old graphics cards, and then even bought off Ebay an ASIC Miner, for $24.

My $25 Ebay purchase this week for 330 Mhash/sec
My $25 Ebay purchase this week for 330 Mhash/sec

In the last hour, with two graphics cards (one a year old, one pushing three) pushing 270 Mhash/sec, and an ASIC “Block Erupter” doing 330 I’ve added .00008 of a bitcoin using the BTCGuild pool.

In early April having a couple of graphics cards intermittently hash, 0.049 of a bitcoin was made.  The “difficulty” has been soaring ever since:

a linear y axis showing Bitcoin difficulty soaring roughly 10x since April
a linear y axis showing Bitcoin difficulty soaring roughly 20x since April (click to enlarge)

(a full spreadsheet is at https://docs.google.com/spreadsheet/ccc?key=0AmcTCtjBoRWUdHVRMHpqWUJValI1RlZiaEtCT1RrQmc)

I won an auction for another 5 ASIC disruptors for $95 which is hopefully on it’s way; this brings the total hardware investment (specific to Bitcoin) to be roughly that of…drumroll please…a bitcoin itself now at $122.  Can it pay for itself?  Yes there is an energy cost as well but that will be removed when solar panels come to our house (in prep for an electric car one day we’re getting slightly more capacity then we need for regular household use.)  The six ASIC miners should be doing 1.8 GHash/sec, and the graphics cards which are needed elsewhere and can flake out will be mostly put to pasture.

This underscores what a joke the Butterfly Labs delays have been.  As an aspiring hobbyist in April I ordered a Jalapeno for $274 to do 5 GHash/sec.  There is still no delivery estimate.

I can accept the losses and even invest further as a hobbyist: the removal of electricity costs with the belief in an upside surge possible makes it very intriguing.  I nearly swooped in at the end of an eBay bidding tonight for a 50 GHash/sec Butterfly device the seller claimed to have in possession.  Maybe make an offer for ASIC Block Disruptors for $10-15 to the big Ebay sellers?

I confess I find the three variables (Hashing, Difficulty and Price) fascinating.  I should have roughly 7 Ghash/sec capacity hopefully soon for a total of $400.  But as Terahash miners ship in January their days may be numbered.

But the majority of any capital I may put into Bitcoin likely will be direct acquisition of the commodity unless I can figure this out better.

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