Newbs Guide to Bitcoin Mining: USB Miners Are Not Worth Your Time

in #bitcoin3 years ago (edited)

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Great Time For Bitcoin, But a Lot of New Users Are Getting Burnt On Mining Gear Purchases

Due to the influx of new blood into crypto, its bound to happen a lot of newbs will make a few mistakes along the way. Recently I just met a guy online that bought 100 USB Bitcoin Miners for $30 bucks a piece on Ebay and had to enlighten him that the return on investment for such a purchase is not looking too good. This is an area where a lot of research is best for new users into the mining camp. The days though of USB styled miners on SHA-256 Bitcoin algorithm is literally a by gone era if you want to make profit, in my opinion buying one to learn mining is fine but spending $3000 on a lot of USB miners is a huge mistake I wish I could have prevented on this new user I met recently. So I am here to educate on this today in hopes it sways people from making a similar mistake.

USB Miners aka Block Erupters and Their Lack of Usefulness for Mining in 2017

When you get into Bitcoin mining as a new user, you got to do a lot of research and take the time to focus on the time stamps of posts on forums and articles. What was good back in 2014 is not going to be valid for your adventures in mining in 2017. Reason is a few factors that you must educate yourself on but the list is as follows:

HASHRATE

A hash is the output of a hash function and, as it relates to Bitcoin, the Hash Rate is the speed at which a compute is completing an operation in the Bitcoin code. A higher hash rate is better when mining as it increases your opportunity of finding the next block and receiving the reward. Ultimately the more hashing you can get out of your setup the faster you can find the blocks where the rewards are located. Hash rates in miners back in 2014 were way lower and less power efficient compared to miners being built now a days.

DIFFICULTY

Bitcoin difficulty is an estimate on how difficult it is to mine (aka find) a new bitcoin block. Bitcoin mining has two main purposes. One is adding transactions to the bitcoin block chain. The other purpose is to create new bitcoins. The total number of bitcoins that will ever be mined is limited to 21 million. Every day that difficulty is increasing so therefore miners being pawned off as used and from years ago tends to not retain that return on investment factor too well because they take forever to over come this issue of the increased difficulty that is in place with the algorithm.

POWER EFFICIENCY

The last factor when you go to purchase a Bitcoin miner is how much power that bad boy will draw from the wall. This area is more important than most factor in. You can literally spend more in electricity vs what you make in profits if you purchase a very dated miner that does not keep up with the returns vs expenditure of your power bill. In this area I have found anything older than 2015 is pretty much only useful to those with solar power or want to make a miner a nice heater in the winter, even at that they are more expensive to run as a heater in place of a real heater.

When you put all these factors in and do some serious math you will find out that a lot of the stuff you see on Ebay is literally in most cases people passing off dated old equipment onto new users so they can virtually upgrade their mining systems for better miners. This area I think is a tad unfair to do to the new users coming into the space but it is also on people to educate themselves on what they are buying so there is a sad catch 22 on what is worth your purchase and what is not. I don't view any USB miner at this stage worth anyone's time because they are underwhelmed in return of investments when you crunch the numbers.

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What You Can Expect From USB Miners in 2017

Honestly the only given advantage I see with USB miners at this stage is a fun way to learn what crypto currency mining is like. Its a cheap route to learn the technical ins and outs of mining but please remember this route of mining is not going to get you rich unless you run these bad boys for 50 years straight and you cash out for retirement.

The biggest downside isn't its power efficiency on USB miners, in that aspect they don't really draw too much on you if you have a couple running. They are just not with a lot of hash rate, when you stack them up your actually better off to buy and actual ASIC miner machine which would be way more cost effective in the long run. These also heat up bad, they are known to not have long life spans unless you put some fans on them to keep cool. In the end until there is a new line up of these that out hash the current miners, USB miners are virtually at this stage a thing of the past.

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SOURCE

Always Research and Be Careful With Your Investments

Trust me when I first got into mining I made a few bad purchases myself off of old Ebay. I got pawned off onto some old Antminer S4s that virtually break even when I run them full on weekly. These things happen when you are trying to learn but I wanted to write this because when I seen this guy buy $3000 worth of USB miners it made me cringe for him. He could have bought a couple ASICS way more profitable so I wanted to put this out there in case someone else hits up old Ebay and gets conned into thinking such an investment will help their families out. Be wise out there, cheap does still mean cheap even in Bitcoin mining, you still get what you pay for in this area even though its crypto.

~sflaherty

Follow me @sflaherty

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This is true. Good points for the newbies. It's not that easy anymore. If only it was..

I just hate seeing new users get taken advantage of because they didn't get the proper info. I can't hate someone for selling off old miners but they should be up front about the fact buying a lot of them like that can be a waste of money on someone. USB miners are great if you want to learn or add a few hashes into the mix but going all in on them is not cost effective.

0.1 BTC free for mining-you can buy 9 th/s lifetime , offer limited time https://seebit.io/?r=56086

Well written article @sflaherty - Have you seen the new D5 video

Haven't had a chance due to the massive growth in SBC to sit and watch it but I did repost it for them on our pages. Its growing so fast and we are developing some stuff that its hard to find time to sit and chill anymore lol...good thing though, slack is filling up fast

Thank you so much.

0.1 BTC free for mining-you can buy 9 th/s lifetime , offer limited time https://seebit.io/?r=56086

Hehe must admit, your previous article had me looking at gear... thanks for the heads up, it already looked fishy.
What about these in the cloud miners? Are they worth it? Genesis and the like. Or do they just fleece you with commissions etc. so it's no ROI.

I am still very skeptical about cloud mining....every since they came out old timers call them scams. It seems to me you have to keep buying more hash to return profits so I am unsure by the math completely how good they are. Its virtually renting miners when you can end up owning them lol....rental for income always tends to make me skeptical.

USB Miners were great a long time ago but they don't go anything for anyone now a days. I just hate seeing the unloading of so many useless miners on sites like Ebay and Amazon lately....its getting the new guys hard lately

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0.1 BTC free for mining-you can buy 9 th/s lifetime , offer limited time https://seebit.io/?r=56086

This article is really worth reading.... very informative and has good intention for people not to lose money especially in this steemit community where majority of people have an interest in mining cryptocurrencies. Well done, my friend @sflaherty. Upvoted and resteemed!

I just hope people really crunch the numbers before buying a miner, it can be a benefit to mine or you can literally break even or actually spend all your profits just to mine. USB Miners are junk in my opinion, its why they are $30 a stick now a days lol. Honestly you can make change with them if you run a long time but I would not expect a big return on them

Thanks for the warning... by the way what's your best recommendation to use for ordinary people like me? Computer specs perhaps and on what crypto coins?
I have tested lately what Bela coin has launched just about 3 days ago using only my desktop computer, of course it is not much but I am just trying to test the waters at this time...

Are you talking about Belacam? I actually used to be heavily active in the Bela slack a year back but kind of moved on from them, seems like it might do something but I am unsure with the tipping system they got running in there if it will do well. Always research when it comes to mining my friend

I honestly recommend for starting out to mine with a GPU or CPU, just to learn it, CPU mining won't get you a lot but it always helps to get the idea of how it runs and works. If you have a graphics card, I mine LBRY usually, tends to run very well and bring in decent money

No... Bela just introduced their own mining for their coins. I tried it about 4 days ago as they claim it is 250% more profitable than Bitcoin and you can mine even just using your Windows computer. Here is my post about it : https://steemit.com/cryptocurrency/@arnel/i-started-mining-belacoin-today-just-by-using-my-personal-computer-and-it-works-so-easy-in-under-20-minutes

With Belacam I tried it too, months ago when it Beta launched, there were too many issues in posting your image at that time so I just forget about it.

Wow had no clue the reopened up mining for Bela again lol. I was early on that coin back in the day, used to have long conversations with their dev team when they were a small group. I have to check that out, maybe this will boost SBC's profile lol

I am following them on Twitter that's why I got the info early. With Belacam I remember I lost some money when I actually bought some Bela at Polo when Belacam was Beta launched. It never went as high as I expected then it dropped that I lose some money with it. Not much, but it was one of the few times I lost with trading back then...

Kind of why I stopped messing with bela, too many ups and major lows over the last year. They try but they always kind of half deliver...hopefully they will change that soon

0.1 BTC free for mining-you can buy 9 th/s lifetime , offer limited time https://seebit.io/?r=56086

Thanks for the very informative and enlightening post on USB mining. I guess as with all things, it doesn't hurt to do a bit of research before diving.

I agree, especially with crypto. Extra time to research can save a person for getting into a bad investment. Mining hardware can do you right or completely waste your time and money due to the rate of progress in the technology. USB miners are good for little side learning, maybe add a few small hasshes to your mix but trying to mine on them solo is just a huge waste of time at this stage sadly. I just wish they would stop trying to pawn off dated miners on users out there

0.1 BTC free for mining-you can buy 9 th/s lifetime , offer limited time https://seebit.io/?r=56086

Where the money is at, is selling mining equipment, selling mining services, ect. Sell something to crypto people to make the money, if it is a useful thing they will buy.

I agree if it is useful they will buy but honestly most of the miners I see right now on Ebay are literally not worth even looking at if its built prior before 2016. I got trapped on 2 miners myself in my early days. Bought 2 antminer S4s without doing the cost of electricity vs profit margin. If I run them 24/7 for a month right now, I actually owe the electric company here more money than I earn lol. People are in droves trying to pawn off these same exact miners I bought to upgrade their equipment. Maybe when Bitcoin hits around $5000 a coin it might be worth firing up again but we do have to crunch them numbers on these machines, older styled used ones tend to never return your investment anymore. Mine just sit offline collecting dust, worst $500 I ever spent lol...but I was new to this stuff back then and paid for the experience I believe lol

So, you saying that no need to use low cost and easy to use miners like these https://www.eltima.com/list-of-usb-asic-miner-hardware/, because it has no sense?

Thanks for very informative article.

0.1 BTC free for mining-you can buy 9 th/s lifetime , offer limited time https://seebit.io/?r=56086

So sorry for not seeing this comment @adoris till now, your comment got missed somehow and I apologize for that. Yea I wouldn't invest in any BTC miner that is usb based, least the older stuff, well actually I don't think there is any new ones to this day that actually will earn you anything. Reason is the difficulty is insane now to mine BTC directly even with a GPU and also on some other coins. Its at a stage where its just for those with serious hash power on BTC to really make it worth mining. I would suggest at minimum now a days to stick with GPU mining or Asic mining if the money is available to do so. Sad though, at one time USB mining was worth it but at this stage anyone trying to sell USB miners are really just trying to pawn off dated hardware onto someone else.

0.1 BTC free for mining-you can buy 9 th/s lifetime , offer limited time https://seebit.io/?r=56086

Thanks for giving your valuable advice on Bitcoin Mining.
In Malaysia, Bitcoin mining using MLM operation just started, quite sceptical not sure if the creator trying to cash out as I know BTC and ETH are shifting to PoS instead PoW. Surely this will affect the miners right.

0.1 BTC free for mining-you can buy 9 th/s lifetime , offer limited time https://seebit.io/?r=56086

Sorry i did not see this till now. Your very right, its good to be skeptical of the MLM operations you speak of. POS at this stage is probably going to be what is more adopted, I mine but I also am prepping for less coins to actually mine due to this. Its gonna take time but I bet you there will be very few to mine down the road seeing POS has kind of upgraded crypto and I would suspect that will end up being where most head to eventually. Mining is great but it is really energy costly and also still doesn't stop bad actors from taking over a whole network, POS seems to eliminate that

0.1 BTC free for mining-you can buy 9 th/s lifetime , offer limited time https://seebit.io/?r=56086

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