[How to] fund your cruncher's utility bill OR how to make money using bitcoin

[jcool]

Hey guys,

haven't been on here a lot lately, I know. Sorry about that, busy times...
Anyway, I found out about a little something called "bitcoin" yesterday. In short, it's an alternative sort of "internet currency" that has been around since 2009 (if only someone had mentioned it to me 1-2 years ago...). The idea is to trade the bitcoin (BTC) for real money like USD or €, or even gold. Some websites also offer products and services that you can pay by using bitcoins: https://en.bitcoin.it/wiki/Trade

While this concept isn't new, there is something about bitcoin that makes it VERY interesting to us crunchers - you can generate ("mine") bitcoins by using your computer. Similar to crunching, it uses your computer's resources to generate these "coins".

Now, I've been at this for a day now, and I don't know everything yet, but I can tell you it works. I'm also going to tell you what you need to know in a nutshell, so everyone can profit while it lasts. Ok then, let's get started with the How to.

--------------------------------------------------------------

What you need:

1. One or more fairly recent, ATI-based GPUs. HD5xxx and up are best at this, Nvidias are a lot worse, CPU is useless
1a. The right driver. Be sure to download the current ATI driver WITH APP, else it won't work. You can also download the OpenCL SDK separately. With HD5xxx cards, performance is supposed to be best with the older 2.1 SDK (I can confirm this). For HD6xxx, use the current 2.4 SDK because 2.1 won't work with them.
2. Good GPU cooling, as with all GPU crunching/mining projects
3. Preferably cheap electricity, but it's still worth running even in more expensive regions (like Germany...), provided you have the right hardware

Performance is measured in MHash/s (Mega-Hashes per second). Here is an overview of what different cards can do: https://en.bitcoin.it/wiki/Mining_hardware_comparison

As we can see, HD5870 and HD5850 cards are among the best performers, closely followed by current HD68 and HD69 series cards.

Setting it up
Setting up is quite simple really. First, you have to make a choice between joining a so-called mining pool or going solo. I strongly recommend using a mining pool, because that will provide you with a steady payout and work better in general.

0. You need to download the bitcoin core app that acts as a "digital wallet", it contains the key where it saves the amount of bitcoins that you have earned. Download here: http://www.bitcoin.org/
Starting up, it will show your bitcoin address (a long key that is generated randomly).

1. Assuming you are joining a mining pool, just go to their website and register. I use the deepnet pool, which is currently the biggest one and also has the best (lowest) fees from what I could tell: https://deepbit.net
Edit: I now use the BCT Guild pool, which has no fees at all! Recommended (you can still donate a % to help keep it running, but you don't have to): http://btcguild.com
When creating your deepbit or BCT guild account, you have to enter your bitcoin address so the pool knows where to send your coins to. Just copy & paste the address key from the bitcoin core app you previously installed.
You will also need to set up a "worker" in your deepbit or BCT guild account, but that's kinda straight-forward really.

2. After you have created your mining pool account, download and unpack the GUI miner tool to a destination of your choosing: http://forum.bitcoin.org/?topic=3878.0

3. Start guiminer.exe, you'll find the following window:



4. Select "deepbit" or "BCT Guild" in the "Server" drop-down menu and enter the e-mail (deepbit) or name (BCT Guild) and password matching the worker's which you created on deepbit/BCT Guild

5. Under "Device", select your GPU. It will show your CPU and all available GPUs.

6. Optionally, you can add extra flags. For ATI HD5xxx and above, the "-v -w128" flags are supposed to be ideal. Don't know about other cards, check the list I posted in the beginning.

7. That's it - just hit "start mining" and you GPU will start working.

8. If you have more than 1 GPU, set up a 2nd (3rd, 4th etc) worked thread. "File" --> "New OpenCL Miner" --> choose any name you like (I used "GPU2") and set it up exactly the same way as the first one, bit one difference: you have to choose the 2nd card under "Device":



Under "View" --> "Show Summary" you'll see a summary of all running GPUs:



A note on multi-GPU setups:
- works best with Crossfire (or SLI) disabled
- every card needs at least 1 monitor, KVM port or VGA dummy plug connected to it or the GUI miner won't show it under "devices", much like FAH
- mixing different cards in 1 system is not a problem

---------------------------------------------------------------------

What are the "WUs" exactly? What is it all for? How does it work?

They're not "WUs" in the classical sense. Instead, they're basically a cryptographic way of packaging the records of all recent bitcoin transactions since the last block, making it secure through a bunch of probability theory, etc.

Basically what mining is doing is taking the list of transactions (actually a compressed form of it), adding in a few addition pieces of information (last block ID, timestamp, client version, client computing it, difficulty, etc.), plus a random number (called a nonce). As a whole, all of this information is SHA256 hashed twice with the goal of achieving an output value composed of 00000000XXXXXXXXXX... where the number of zeroes required are determined by the difficulty and the Xs are left to whatever value they may be. The input's nonce is incremented until the output happens to match such an acceptable value.

Once the hash's output reaches the accepted goal, it's sent to the whole network as the official next block, where it's used as a header to the log of transactions going with it. Just to note, there's additional confirmation that continues for the next so many blocks to make sure something underhanded didn't happen, like someone generated a bunch of blocks targeting a really easy difficulty or something.

What mining is all about is: the first person who generates one of these valid solutions first gets a pre-determined "prize", which right now is 50BTC. However, view it as whoever is "lucky" enough to generate a valid solution first, since the transaction log is continuously changing and hashing is a one-way function. This means that no matter how long you've been trying things, it's basically brute-forcing, you don't know how much longer there is to go.

to rcofell for the great explanation

---------------------------------------------------------------

Performance tuning tipps:

- Overclocking your GPU core is very efficient to raise your score, especially on cards like the HD5750/5770/5850
- You can lower your memory clock to save power and keep your card cooler, it doesn't affect hashing performance
- You do NOT need a high bandwidth slot (ie PCIe x16) for optimal performance. In fact, I just ripped open a few x1 slots today and put 5750's in - performance is normal
- there seems to be an issue where the GPU client takes up an entire CPU thread even though it doesn't really do anything, observed primarily on multi GPU setups under Win7 64Bit. Try to use 32bit windows, or Windows XP, or Linux (and report your findings please)
- if your card runs too hot on air cooling, consider lowering the GPU core voltage (only available on some models) or adjusting the fan speed using CCC or MSI Afterburner

---------------------------------------------------------------------------

Ok, now that we got it running & producing - what the hell do we do with it?

First off, check your total Mhash rate. Here is a calculator that shows your estimated output if you enter your individual hash rate: http://www.alloscomp.com/bitcoin/calculator.php

It will also show your projected earnings in BCT and USD.
Bitcoin is like a "stock" that changes in value, see here for current exchange rates: http://www.bitcoinwatch.com/

Once you have earned enough, you'll see a balance in your bitcoin core app.
There are several possibilities to "sell" your bitcoins for real money. I haven't tried a lot of them, but here are a few:

https://mtgox.com/
https://bitmarket.eu/ (for us european folks)
https://www.bitcoinmarket.com/
http://bitcoinme.com/
https://www.bitcoin2cc.com/

I'm sure there's a lot more, just try for yourself and report back.

-------------------------------------------------------------

Problems & solutions

I see that many people are still confused on many things. I am still learning as well, but here are some of the most common issues and how to solve/react to them.

CPU usage is through the roof and/or BOINC is slowing down GUI miner
Your poclbm.exe tasks are using up an entire CPU thread per card? This is a bug that happens mainly on Windows 7 x64 with multiple GPUs. Single GPU miners do not have this problem. 32Bit Windows didn't help for me - WinXP might work. Running Linux definitely helps.
However, there is at least a partial work around: If you lock the affinity of each poclbm.exe instance to the same CPU core (and not all cores), all running miners will share that one CPU thread/core and not use up more than 1 in total. It's not ideal but better than losing 2, 3, 4 etc threads.
If WCG is slowing down the GUIminer, either increase the priority of the running poclbm.exe threads or leave 1 CPU thread/core free via BOINC settings.

I can't connect to a pool, it keeps saying username/password wrong
Make sure you use the worker name which you created on the pool's website as username, NOT your login data to the pool website


I can't connect to a pool, it keeps saying RPC error
The pool might be temporarily down. Or you may be experiencing network trouble. Also make sure port 8332 is forwarded through your various firewalls. Not needed if uPnP is enabled.

The bitcoin core app doesn't want to show any blocks/connections and bitcoin transfers to my wallent don't seem to work either
Make sure port 8332 is forwarded through your various firewalls and/or enable uPnP. BCT transfer will only work correctly once all blocks are connected & shown (currently 128673 blocks, value is increasing so it must show more than that in your bitcoin core client)

Where is my bitcoin credit actually stored? Can I use the bitcoin app to transfer bitcoins on more than 1 computer?
Yes, you can. All your transactions and credit are stored in a file called "wallet.dat". On Win7, it is located under C:\[your username]\AppData\Roaming\Bitcoin. If you want to use your wallet on another computer, simply install the bitcoin core app to that other computer and then copy over your wallet.dat file - done.
Also make sure to back up your wallet.dat file frequently (every 1-2 weeks) so you won't lose your credits in case ur machine crashes!

The address shown in "my bitcoin address" is constantly changing - what does that mean and do I have to change the bitcoin address in my pool's settings to correspond to the new address?
This is normal, and a sort of anonymity feature of the bitcoin network. A new address is usually generated after a successful transfer in order to preserve your anonymity. You can also manually create new addresses by hitting the "new" button next to your current address. But don't worry, payouts will still reach your wallet safely through the old address, so no need to go update the address on the pool all the time.

GUIminer won't start, showing an error message like this: "the application has failed to start because it's side-by-side configuration is incorrect"
I've gotten that error myself on Win 2008 R2. I fixed it by downloading & installing the Microsoft C++ 2008 SP1 x86 library. GUIminer needs it to run, and you need to install the x86 version I just linked even if you are on a x64 OS. Windows 7 users do not need to do this, as C++ 2008 is already there.

GUIminer does start, but it says there are no OpenCL devices detected
Make sure your GPU(s) support OpenCL (ATI HD4xxx and up, Nvidia G80 and newer). If you just installed your brand new ATI drivers and still get the error, try manually installing ONLY the OpenCL part of the driver located at C:\ATI\[...]\Packages\Apps\OpenCL[32/64]\OpenCL.msi
The C:\ATI folder structure is being deployed by executing the Catalyst installer package, so if you don't have it or already deleted it, just re-run the latest Catalyst installer.

-----------------------------------------------------------------


Ok folks, that's all for now - bed time for me.
Just thought you'd like to know. By running what I already had lying around (3x HD5870, 2x HD5770, 1x HD4850) I am currently earning around 25€ a day, increased electricity included. I already converted a few bitcoins to € and yes, it is real - people are using bitcoins to trade, and are actually buying them. For now...


So long

J

[Otis11]

Ah... And I don't have a single ATI GPU... if this turns out I might get one just to experiment. Gonna wait for more results first.

Thanks for the guide!

[don_xvi]

Awesome writeup for us! I've got my 5870 working!
The one thing you could edit is to clarify that you need the OpenCL APP, which some may have elected not to download if they were just using their card for graphics. If you don't have OpenCL installed, the GUI miner will inform you there are no OpenCL devices detected. The download page for the GUI miner pointed me to an ATI OpenCL page, but it would have been easier to just download the version of the drivers with the OpenCL included (they have two versions on the driver download page).
Stock (I think) 5870 is pulling in 350 Mh/s.

[don_xvi]

Note! From the wiki page on mining performance:

AMD

To get the maximum performance use the 2.1 release of the ATI Stream SDK. 2.2 wastes CPU time, and 2.3/2.4 drop mining performance by 5-10% unless using the Phoenix phatk kernel.

I'll hunt on that tomorrow.

[CaptMorgan]

Without doing any searching before typing I do recall reading a little about Bitcoin- that it is actually substantial and has some financial dudes worried

[shoota]

What do those websites do with your bitcoins once they pay you for them?

[don_xvi]

What does the buyer do with your car after you sell it?
I'd prefer he not fill it with diesel fuel and fertilizer, I guess, but as long as the money's green!

[CedricFP]

So why are people buying bitcoins now? In the hopes that this new currency won't flop on its face?

[shoota]

What does the buyer do with your car after you sell it?
I'd prefer he not fill it with diesel fuel and fertilizer, I guess, but as long as the money's green!

I ask because if they are willing to buy it then that makes me think they know something. Maybe bitcoins are worth a lot in some other aspect or market or something.. maybe they are just stock piling them as an investment.

[NKrader]

finally a reason to purchase ati!

[CedricFP]

Also, do the mining pools pay out in bitcoins or in hard currency?

It strikes me as odd that people are gambling on a new currency in its infancy by buying bitcoins.

[slaveondope]

Also, do the mining pools pay out in bitcoins or in hard currency?

It strikes me as odd that people are gambling on a new currency in its infancy by buying bitcoins.

Investment = Risk

Bitcoin has paid my bills for the last month while Im still unemployed. My farm contains 6x5830's, 8x5850's a lone 5770 and still growing. Thats all Im sayin

[STEvil]

So.. the GPU/CPU is computing something when "mining" bitcoins.. what exactly are they computing?

[slaveondope]

So.. the GPU/CPU is computing something when "mining" bitcoins.. what exactly are they computing?

All previous transactions and matching your results to the other nodes.

[CaptMorgan]

So.. the GPU/CPU is computing something when "mining" bitcoins.. what exactly are they computing?

This please

[Serpentarius]

From what i know ... if anyone can print the bills ... or mine the bitcoins .... sooner or later ... the inflation will grow and collapse it, regardless what currency it is.... typical MMORPG currency .... it get inflated very quickly

[slaveondope]

From what i know ... if anyone can print the bills ... or mine the bitcoins .... sooner or later ... the inflation will grow and collapse it, regardless what currency it is.... typical MMORPG currency .... it get inflated very quickly

New coins are generated by a network node each time it finds the solution to a certain mathematical problem (i.e. creates a new block), which is difficult to perform and can demonstrate a proof of work. The reward for solving a block is automatically adjusted so that in the first 4 years of the Bitcoin network, 10,500,000 BTC will be created. The amount is halved each 4 years, so it will be 5,250,000 over years 4-8, 2,625,000 over years 8-12 and so on. Thus the total number of coins will approach 21,000,000 BTC over time.
In addition, built into the network is a system that attempts to allocate new coins in blocks about every 10 minutes, on average, somewhere on the network. As the number of people who attempt to generate these new coins changes, the difficulty of creating new coins changes. This happens in a manner that is agreed upon by the network as a whole, based upon the time taken to generate the previous 2016 blocks. The difficulty is therefore related to the average computing resources devoted to generate these new coins over the time it took to create these previous blocks. The likelihood of somebody "discovering" one of these blocks is based on the computer they are using compared to all of the computers also generating blocks on the network.

https://en.bitcoin.it/wiki/FAQ

[CedricFP]

Investment = Risk

Bitcoin has paid my bills for the last month while Im still unemployed. My farm contains 6x5830's, 8x5850's a lone 5770 and still growing. Thats all Im sayin

So where are you selling your bitcoins?

Why is there consistent demand as more people start mining with old ATI hardware? EDIT: ^ also see above.

Who is actually buying these?

What about inflation concerns? EDIT ^ ah, I see your post above.

How secure is the code behind the miners?

[slaveondope]

So where are you selling your bitcoins?

Why is there consistent demand as more people start mining with old ATI hardware? EDIT: ^ also see above.

Who is actually buying these?

What about inflation concerns? EDIT ^ ah, I see your post above.

How secure is the code behind the miners?

SHA256 encryption.

edit: other questions not easily answered. various reasons. Anonymous exchange is a big reason though and it's also designed opposite of current systems where inflation (new money introduced) is an
issue.

BTC forum

Exchange

Dwolla the new Paypal without the bs

[lkiller123]

What do they do with the results that are "mined" through your computers?

How do they generate the profit?

[slaveondope]

What do they do with the results that are "mined" through your computers?

How do they generate the profit?

Your "miners" compare results with others to track all transactions current and previous so no one can double spend or create fake bitcoins. You are not generating profit. Your are providing network security and while you do so you "stumble" upon new coins that are released at the predetermined rate. What gives bitcoins value is just like any other currency the backing of goods, services, and "faith" just like our current fiat currencies.

Worth while to watch.http://video.google.com/videoplay?do...6773770802849# that's our current system. Bitcoin is near opposite of that.

[mav2000]

How much bandwidth does this use? Does it download and upload a lot?

[slaveondope]

Keeps saying error on connection...not working for me. DO we need to login with a worker name or the login name.

Use worker name and password.

[Red Maw]

Pay Per Share: You get a fixed amount for every share submitted. This method has zero variance but slightly higher fee (because pool takes the risk). Recommended if you like steady payouts.

Proportional: You get a portion of every solved block proportional to your part in pool's hashing power. This payment method has a noticeable variance: some days you can get less, some days you can get more. This is due to randomness of searching for proof-of-work.

For deepbit's payout systems, is the proportional method based off your contribution to the entire pool, or your contribution to a block? Trying to figure out which one will yield the most for a single gpu user like myself.

[slaveondope]

For deepbit's payout systems, is the proportional method based off your contribution to the entire pool, or your contribution to a block? Trying to figure out which one will yield the most for a single gpu user like myself.

Pay per share is based on submissions per block compared to pool @ 3% fee

Proportional is set based on current difficulty http://bitcoincharts.com/markets/ +10% fee
However 3% of fee has been lifted from both due to recent DDOS attacks. I use PPS.