The proliferation of Bitcoin ASICs over the last several months have brought on an incredibly rapid increase in the Bitcoin difficulty factor. If you run the numbers on the currently available Bitcoin ASICs you’ll find that you’re unlikely to make a return on your investment. In fact, purchasing one of these Bitcoin mining machines now is probably more likely to lose you money (with some possible exceptions for next-generation pre-orders). Still there are a number of hobbyists and Bitcoin enthusiasts looking to invest just a small bit in order to contribute to the Bitcoin network’s hashrate.
For those new to Bitcoin, an ASIC is an Application Specific Integrated Circuit. Stated in layman’s terms, a small computer built specifically to mine Bitcoin and nothing else. They first came online earlier this year (2013) when Avalon ASIC shipped. Around the same time a company called ASICMiner began hashing away with their private group of Bitcoin miners. Later in the year ASICMiner made some of their ASICs available to the general public by selling two products. This article covers the ASICMiner Block Erupter, a USB device not much larger than your typical thumb drive that hashes at a speed of 330 MH/s on average. ASICMiner also manufactures and sells the ASICMiner Blade with a speed of around 10 GH/s.
Purchasing Block Erupters
ASICMiner only sells its Block Erupters and Blades in bulk which has led to a number of resellers popping up. I purchased my eight Block Erupters a week or so ago from BTCGuild.com for 0.19 BTC a piece. At the time of this writing BTCGuild lists them for 0.15 BTC a piece. There are also a number of individuals selling Block Erupters on Amazon and Ebay for various prices. Before it went down earlier this week, BitcoinTalk had quite a few merchants selling the hardware; it would likely be a good place to look if it comes back online. The best price I’ve found recently is through BitCanary. The BitCanary website lists a price of .17 BTC, but contact them directly through their site as I believe they currently offer a price of .105 BTC through BitcoinTalk or email (Also via this Reddit thread).
Setting Up Block Erupters
If you plan on running multiple Block Erupters, as many do, you’ll need a USB hub. Not just any hub will do however. You’ll need a powered USB hub and one that supplies enough power to run the Block Erupters. Cheaper powered hubs won’t provide enough power and will result in errors. Some miners report buying cheap 8-10 port hubs just to find that they can only run 3-4 Block Erupters. For my setup I chose a 9 port powered hub by Anker currently listed on Amazon for $59.99. While it is more expensive than other hubs with the same number of ports, it works well and will likely be used with future USB miners.
- Plug in your ASICMiner Block Erupters to your USB hub and/or computer. (Install any drivers needed for your particular USB hub, if any).
- Download and install the following drivers required for running the ASICMiner Block Erupters Silicon Labs Drivers.
- (Windows 7/8) Check that the drivers were setup correctly by navigating to: Control Panel -> Hardware And Sound -> Devices And Printers. You should see Silicon Labs CP210x USB to UART Bridge listed.
- If you don’t already have a mining program, download one. I recommend BFGMiner, as some miners have reported problems using CG miner with the block erupter drivers on Windows 7/8. BFGMiner Download
- To setup a BFGMiner shortcut, navigate to the BFGMiner folder. Right click on the BFGMiner application file and click Create Shortcut. Right click on bfgminer – Shortcut and click Properties. In the target section you should see somthing like the following: C:UsersUsernameDesktopbfgminerbfgminer.exe You’ll need to add the following (using your pool’s information) -o http://stratum.bitcoin.cz:3333 -u Username.worker1 -p Password -G -S all –icarus-options 115200:1:1 –icarus-timing 3.0=100 When complete, the target section should read something like this (will be different for linux users): C:UsersUsernameDesktopbfgminerbfgminer.exe -o http://stratum.bitcoin.cz:3333 -u Username.worker1 -p Password -G -S all –icarus-options 115200:1:1 –icarus-timing 3.0=100 Once complete go ahead and click apply.
- Start your miner by double clicking on the shortcut that you created, you should now be hashing away.
As stated earlier, you’re unlikely to turn much of a profit by investing in ASICMiner Block Erupters. Consider for instance that the current price of a Block Erupter is 0.15 BTC or ~$18, and that they hash on average at a speed of 330 MH/s. With the next estimated difficulty at 187292124, that would put you making around 0.01 BTC per week. What’s worse is that the difficulty is likely to continue to increase drastically meaning you’ll be making only a small fraction of that in just a few weeks. Adding more Block Erupters would only magnify your losses.
It is possible to imagine a scenario in which investing in current mining equipment could become profitable again. For instance, if the price of mining hardware were to stay constant (as measured in US Dollars or other fiat currencies), and the price of Bitcoin were to drastically increase, it is conceivable that investing in currently available mining hardware could yield a profit. However, this is an unlikely scenario and you would still be better off now from a fiscal standpoint investing directly in Bitcoin rather than in hardware (Bitcoin can be purchased directly through exchanges like Bitstamp or services such as Coinbase). By most estimations you’re only likely to turn much of a profit in Bitcoin mining if you invest in the next generation of mining hardware. The Genesis Block has a mining calculator that displays estimated profitability from many of the Bitcoin ASICs on the market.
Bitcoin mining may be entering a more professional era. Like many I had hoped that ASICs would be a bit of a leveler for Bitcoin mining, helping even the technological layman enter the field. However, failures in development and shipping timelines from companies such as Butterfly Labs seemed to have stunted the interest of many entry level miners. Today the Bitcoin mining industry favors larger, more powerful machines. We’re seeing more and more group buys of these machines with the rewards being disbursed amongst the investors. Still, for the hobbyist and Bitcoin enthusiast the slew of USB powered miners out there offer a way to get acquainted with Bitcoin mining and contribute to the network, even if it won’t make you Bitcoin rich.
(If you need a primer on registering for a mining pool or the basics of mining, check out our article on GPU mining Bitcoin.)