UPDATED 18:51 EDT / DECEMBER 20 2013

NEWS

Ask Dr. Bitcoin: What if I want to get into Bitcoin mining?

“I want to get into Bitcoin mining, but I just don’t know where to look or what to buy. When is a good time to get into the community for mining?” asks Looking For a Mining Hat.

Well, Looking, interestingly enough, when there’s a lull in the hype surrounding Bitcoin makes for a good time to get into mining. After a hype-cycle ends there’s a dwindling demand for current equipment and as a result, the prices go down.

Right now that there’s been a lull in demand because of the recent Chinese regulation shakeup and BTC value has dropped from its ecstatic high. The dyed-in-the-crypto miners will have held onto their rigs and people jacking up prices will be finding themselves out of luck for buyers.

Now there’s a lot of places to attempt to find mining rigs and there’s a certain amount of wariness that needs to come from buying. It’s possible to get something from Craigslist or from trading threads on the BitcoinTalk forums; but first you should make yourself familiar with what Bitcoin mining is, what hardware exists, how it works, and how to use it (there’s a software component to running most rigs.) For those looking for a smaller way into the gig, Block Eruptors might be the way to go (these are small, USB rigs that stack well.)

For using Craigslist, Mark “Rizzn” Hopkins suggests this litmus test, “If you’re paying more than $30 per GH/s, don’t do it–$70 on the top end—right now $30 is the right price for this market. There are plenty of rigs; but make sure the seller is local and has the rig in hand.” The persistence of scams and lemons could be a problem, but treat it like buying a used car and that should limit some of the risk.

To help ease you into the market, look for well-known vendors such as Butterfly Labs (BFL) and KnC.  There’s quite a few others out there, but it’s best to research up on them by checking out their corporate web pages and looking at what people say about them in forums. Bitcoin mining hardware is currently still a little bit wild, wild west with an edge of caveat emptor.

Finally, consider joining a mining pool rather than going it alone—aside from benefiting from being part of a steadier stream, a pool will probably also give you a community of other interested miners who can help get you up-to-date on the nuts-and-bolts of mining and how to better participate in the process.

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