SantaGram.com Offering Santa Letters for Bitcoin

santagram

Atlantic City Bitcoin is getting ready for the holiday season by offering letters from Santa for Bitcoin.   SantaGram.com is a low cost service that sends fully customizable physical letters from Santa using festive stationary.  A discount can be offered for Bitcoin due to the reduced transaction fees.  Several example letters are provided or a customized message can be composed.  Bitcoin is perfect for low cost services such as this.  The price for the 2013 season is just 12 MillyBits to send a letter to anyone in the world.  Email can be sent to Santa free at [email protected] or at http://Santa.Claus.org.  All services protect the privacy of users and no information is sold.

bitcoinsanta

BitcoinSanta.com will be opening shortly for Bitcoin enthusiasts and will provide Bitcoin decals and promotional coins that can be included with the Santa letters sent to bankers, brokers, regulators or others who may wish to receive a Bitcoin greeting.

 

coina-proof-3              coins-qu

 

 

 

“Brain Wallet” Thefts Increasing

“Brain Wallets” are wallets created by a passphrase.  It could be a sentence or phrase or just a group of words.  Some users are confused about how complex this password or phrase must be in order to be secure.  The advice, Don’t do it.

The misunderstandings comes from several things.  A password attack that most users are similar with is where a user attempts to log into their e-mail account or a web site.  In these cases the attacker is communicating with a server that is processing the requests and this is often detected or limited in some way.  A “brain wallet” attack is done offline so the attacker can use many large computers to make many, many attempts without being detected.

Another misunderstanding is just how many attempts can be made.  For instance, replacing “S” with “$” probably isn’t going to add much security.  Many people are surprised after they lose funds with complex or obscure phrases.

Users are also shocked how fast the funds are taken, sometimes less than 5 seconds.  It works using “Rainbow Tables” which are tables of Bitcoin addresses and the associated private keys pre-calculated.  The Bitcoin transactions are monitored in real-time and when a match is seen, the money is withdrawn immediately via a script.  Some users think that if the funds are not taken right away then they are safe.  However, the script may wait until the balance is larger.  Also, the attackers are growing these “Rainbow Tables” over time and these is no telling how large they will become.

While it is possible to do a “Brain Wallet” securely a certain percentage of users will not do it correctly.  The easiest and most secure way to back up your funds is to use Bitcoin Armory wallet.  This is a “deterministic” wallet which means you just need one key to create or “determine” all the addresses used by the wallet.  It is backed up using a long string of letters.  Backing up this string of letters, without identifying it as a Bitcoin wallet, is a way of discreetly backing up your wallet.

One Bitcoin address collecting these funds put into weak “brain wallets” is at

https://blockchain.info/address/1brain7kAZxPagLt2HRLxqyc3VgGSa1GR

370 millyBits has been collected so far.

A recent transaction from the “brain wallet” using the password:  “password” was taken in about 1 second since the Bitcoin transactions are easily monitored:

https://blockchain.info/address/16ga2uqnF1NqpAuQeeg7sTCAdtDUwDyJav

 

 

 

Don’t Confuse Breaking Cryptography and Breaking Encryption

Recently the US Federal Bureau of investigations (FBI) seized bitcoins from the alleged Silk Road operator.  There is also discussion that the FBI has a wallet file that is encrypted.  Around the same time there has been speculation that the US National Security Agency (NSA) worked with the US National Institute of Standards and Technology (NIST) to recommend weak cryptography methods that could be broken.  Some recent articles and commenters have confused these concepts.

Breaking Encryption – A Bitcoin wallet is a collection of Bitcoin addresses and their associated private keys.  The private key is the “password” that allows the coins to be spent.  Anyone who has this private key can spend the funds so for security it is encrypted while it is stored on your hard drive.  That way, even if someone gets the wallet file they cannot read the private keys without knowing the password needed to decrypt the wallet file.  This password has nothing to do with the public Bitcoin address in the wallet and the FBI needs a copy of the wallet file if they wish to try to break the encryption.  Usually a wallet will contain multiple Bitcoin addresses and multiple private keys.  The Bitcoin protocol itself does not use encryption, it uses cryptography.  Encryption is something used to secure the private keys.

Breaking Cryptography In order to create a Bitcoin address a private key is generated and then a Bitcoin address is calculated using a 9-step process.  There is no known way to go backwards from a public address to the private key other than to try to go through all possible keys and there are just too many.  There has been speculation that the NSA has some sort of back door to find the private key from the public Bitcoin address.  This is pure speculation at this point and there is no evidence this is the case.   If this were true then the private address could be determined from the public Bitcoin address.  The wallet file would not be needed and it would not matter if the wallet file was encrypted.  All funds could be taken from the information contained in the Bitcoin blockchain ledger.

How to create Bitcoin Address:  https://en.bitcoin.it/wiki/Technical_background_of_version_1_Bitcoin_addresses

Click this image for a discussion of brute forcing addresses:

btcbruteforce

 

John the Ripper is a common tool to break encryption passwords  |  Choosing Strong Passwords

 

 

 

 

Bitcoin: XBT or BTC?

A new abbreviation for Bitcoin is starting to come into use, “XBT.”  Up to this time “BTC” has been the generally accepted notation for Bitcoin.  Since Bitcoin is decentralized there is no standard or anyone to dictate what it should be.  The XBT comes from an International Standards Organization (ISO) that keeps a list of currencies.  If a currency is not associated with a country then it starts with an “X.”  US Dollar is USD and Gold is XAU.   A more detailed discussion of the standard is discussed by the Bitcoin Foundation Director Jon Matonis:

http://www.coindesk.com/bitcoin-gaining-market-based-legitimacy-xbt/

Bitcoin exchanges have begum to start using the XBT notation but many merchants still use BTC.  It remains to be seen how it will be used in the long term.

There are also other discussions over what fractional terms will be used since 1 Bitcoin is close to $200 in value at this time.  0.001 Bitcoin is one milliBitcoin (expressed as mBitcoin, MillyBits, BitMills, Millies, etc.) which is worth 20 cents when Bitcoin is worth $200.  At this time many sites are still using decimals but this often leads to confusion and errors even by experienced Bitcoin users.

There is also discussion over the standard for the Bitcoin symbol which is similar to the Bhat currency in Thailand:.

bhat

Bhat Symbol

 

Some common uses got Bitcoin are:

bitcoin_bigger  bitcoin1.jpgbtcsymbol2

 

 

Bitcoin Blockchain – The Longest Chain Wins

The Bitcoin “Blockchain” is the database of Bitcoin transactions.  It is basically a ledger and all Bitcoin balances can be obtained from it.  A section is added to the database about every 10 minutes on average.  Each block on the end depends on all the blocks before it so you cannot just insert a new or changed block in the middle.  If there is a conflict somewhere on the network, the longest chain with the most work will always “win.”

It is the chain with the most work rather than the number of blocks.  As Bitcoin has grown the “difficulty” in finding the blocks increases.  The “length” of the chain is measured by how much work it took to find each individual block.  In the early days it was easy to find a block and people did it with laptops.  A blockchain full of the low-work blocks would not replace the current blockchain even it had more blocks because the total work would be less.

One common scenario is that 2 miners solve a block at almost the same time.  Let’s ay it is block number “5.”  We now have block “5-A” from one miner and “5-B” from another miner in a different part of the world.  There are now 2 different Blockchains floating around the network, both of height 5 and this causes a conflict.

Blockchain-A:  Block1 – Block2 – Block3 -Block4-Block5A

Blockchain-B:  Block1 – Block2 – Block3 -Block4-Block5B

Now the race begins for Block6 which is how the conflict gets resolved.  Some Bitcoin miners will mine Block6 “on top of” Blockchain-A.  Others will mine “on top of” Blockchain-B.  The first miner to find Block6 resolved the conflict because they will have the longest chain.  If they happen to have been mining on Blockchain-B then Block-5A is now “orphaned” and is no longer valid.  The miner who found Block-5A will not get the block reward or transaction fees and the transactions will go back into the pool of transactions to be mined.

This system brings up a number of complex issues.  For instance, a large miner could try to intentionally “orphan” blocks to get a large transaction fee or to push a smaller mining pool out of business.

A “51% attack” is where one entity creates a longer chain than the rest of the network.  This can be used to either create a complex “double spend” in order to steal funds or to simply stall the network to prevent transactions from being processed.  There are some estimates of how much a “51% attack” would cost

http://coinometrics.com/bitcoin/brix

but these costs are often exaggerated as they depend on retail prices of Bitcoin miners.  In reality an attacker would most likely develop their own equipment rather than purchase through retail vendors.

 

Bitcoin Transaction Privacy

There have been many claims that Bitcoin is “anonymous.”  Others call Bitcoin “pseudononymous” because transactions are not linked to an identity.  If a Bitcoin address is linked to an identity then all the transactions can be seen by anyone.  In some cases users want transactions to be public for accountability purposes.  Recent reports have implied that nearly all transactions can be linked back to an owner.  The truth is somewhere in between but it takes a little understanding of how Bitcoin transactions work.

One thing that is often confused in the discussion is the difference between a Bitcoin address and a Bitcoin wallet.  A Bitcoin address is a single address while a wallet is a collection of Bitcoin addresses.  The public Bitcoin database, the “blockchain,” contains the balances of all Bitcoin addresses but has no information about Bitcoin wallets.  A Bitcoin wallet is software that runs on your computer and compiles the balance of all your Bitcoin addresses.  (Note that online wallets may be handled differently and this discussion is for software wallets you run on your computer).

The next thing to understand is how Bitcoin transactions work.  Transactions have “inputs” and “outputs.”   The simple rule is that the total of all the inputs must equal the outputs.  That means if you have 10 Bitcoins in an address and you send 1 Bitcoin to someone there is another transaction that sends 9 Bitcoins back to yourself.  In Bitcoin terminology this is called “change” and the 9 Bitcoins goes to a “change address.”  These “change addresses” are created automatically and many new users don’t realize they exist since your wallet totals the balance of all the addresses

There are 2 main ways anonymity is lost.  The first way is aggregating balance to a single address.  If somewhere along the line one of those addresses was linked to your identity they are now all linked together due to the aggregation.  The first step here is to never purposely aggregate the funds.  Many are of the belief that aggregation is somehow necessary .  There is no reason to do that because the wallet program adds up the balances for you.

The second problem is unintentional mixing of addresses.  The standard Bitcoin client (Bitcoin-QT) does not have tools that allows users to easily control which address in the wallet are used to send funds.  Since most users don’t realize all these addresses exist in their wallet unintentional mixing can occur.

To avoid this problem a wallet such as Bitcoin Armory can be used which has many advanced features.  One feature is that multiple wallets can be used to completely segregate funds.  That way you can have wallets with addresses linked to your identity while maintaining other wallets not linked to your identity and they never mix.  Another feature of Bitcoin Armory is “Coin Control.”  This feature allows you to control which address is used to send funds so you can prevent mixing.

The Anatomy of a Bitcoin Wallet video shows these features in Bitcoin Armory.

Note how a donation address on a web page (see below) can link a payment to an identity and transactions after the donation may be traced.  Future tipping and wallet proposals use systems where a new Bitcoin address is created each time a donation is made for both accounting and privacy purposes.

 

 

 

Finance Industry Heavyweights Divided Over Bitcoin

The continuing price rises made by bitcoin have led to a number of different opinions in the finance industry. With the price now sitting at a little over $7,400 (£5,663) at the time of writing, some experts are calling it a bubble.

Others aren’t so convinced, though. Even the issue of whether it is best classed as a currency or an asset have divided opinions among the heavyweight in the finance industry.

Goldman Sachs CEO Lloyd Blankfein is one of the industry experts who has recently spoken out on the issue. He said in an interview with Bloomberg that he has a “level of discomfort” in terms of bitcoin, apparently due to its relative newness on the market, and that he doesn’t hold any investments in it.

However, Mr Blankfein pointed out that he is open to the cryptocurrency, which ties in with his Twitter comments last month that he isn’t ready for “endorsing or rejecting” bitcoin. He pointed out that there have been other pieces of new technology such as mobile phones that he didn’t love at first but that “work out pretty well”.

He went on to say that in the modern world it is possible that things get “backed by consensus”. In addition, he mentioned that it we were able to pop forward in time and see that the currency is a success then we could call it a “natural evolution of money”.

High profile investor Roger Ver is one of those who are among the strongest advocates of digital currencies. He has previously stated that the only way to stop them is to “turn off the entire internet” in every country.

In a recent tweet he said that any country that is “foolish and self-destructive enough” to make cryptocurrencies illegal will only help to speed up the flow of money to the countries that deem it to be legal.

Turkish Central Bank Governor Murat Cetinkaya is another industry figure who has been positive about digital currencies. He pointed out that cryptocurrencies could help financial stability levels if they are well designed.

Bitcoin Sceptics

Among the bitcoin sceptics is Credit Suisse Group AG CEO Tidjane Thiam. He said that the only reason to buy bitcoin just now is to make money, something which “has rarely led to a happy end”. He called this the definition of a bubble.

Apparently less sure one way or the other are finance experts such as Mohamed El-Erian, who is the chief economic advisor at the German giant Allianz. He said that bitcoin has to be currently considered as being “more of a commodity than it’s a currency” and that it may be over-priced.

Other industry figures have come to the same conclusion but Aswath Damodaran, who is a professor of finance at the NYU’s Stern School of Business, came out and said that it is a currency rather than an asset.

He based this conclusion on the fact that the currency doesn’t “generate cash flows” and isn’t a raw material. He says that it is therefore either a currency or a collectible.

If you’re looking to invest in buying bitcoin, you can get the best deals with bitcoin comparison website www.bestcrypto.co.uk.

Alternate Uses of the Blockchain Using Merged Mining

There are currently several alternate uses of the Bitcoin blockchain.  these proposals include using the Blockchain as a notary service (for instance, proof of existence splits a hash into 2 pieces and creates unspendable output.  Bitcoin Time Stamp does something similar but transforms the hash into valid transactions).   Other proposals such as micropayments and “colored coins” also cause concerns about adding things to the Bitcoin blockchain.

One solution is to create other blockchains.  If the blockchain was completely separate from Bitcoin an entirely new hashing network would have to be created.  However, using “merged mining” proposed by Satoshi Nakamoto and recently discussed by developer Mike Hearn on Let’s Talk Bitcoin could allow multiple blockchains to be mined at once by the same network.

A block is mined by taking transaction data, a hash from the previous block, and a “nonce” is constantly changed until a hash is found with a certain number of zero’s at the beginning.  A simple example:

Take a cryptographic hash using the SHA256 hashing algorithm of the term “message” (without quotes) and you get:

ab530a13e45914982b79f9b7e3fba994cfd1f3fb22f71cea1afbf02b460c6d1d

Now start adding stuff until you get a hash that starts with “0”:

1message daad0bc80059253928621a10365de153e335a18f03b9dc7e7e25897fb791f023

2message 6532f42bd1d6ccd00f47c133c3ca1a0fc852598e67c62eb31adab8ceb3aaa680

51message 0985e57510d017b177867168642543ab4f143333ad63782680e812251ab3141e

After going through the numbers sequentially 51 was the first one that worked.  As long as ”51″ is sent along with the message the receiver can quickly verify it meets the requirements by performing the hash.  The added portion, in this case”51,” is called a “nonce.”  The important part here is the nonce can be anything.

Suppose you are mining Acoin and Bcoin at the same time.  Now you have block data from Acoin, block data from Bcoin, and a “mater nonce” that you keep changing until you find a block.  Once you find a block it is a valid block for both chains (assuming the same difficulty).  For example:

Hash this data together:   [Acoin block data  |  Bcoin block data  |  master nonce]

When a block is found:

Broadcast block for Acoin  >>  [Acoin block data]   + nonce  [= Bcoin block data + mater nonce]

Broadcast block for Bcoin  >>  [Bcoin block data]   + nonce [ =  Acoin block data + mater nonce]

This can be done for as many chains as you like.  Slush’s pool has already been merge mining Bitcoin and Namecoin since 2011.

The actual specification is a little more complicated and the difficulties do not have to be the same but this is the basic idea.  The full spec is at

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

 

 

FinCEN Ruling Requested for Bitcoin Mining

Atlantic City Bitcoin has requested an administrative ruling for Bitcoin mining.  The US Treasury, Financial Crimes Enforcement Network (FinCEN) issued guidance on virtual currencies a few months ago.  FinCEN also recently seized bank accounts of a company owned by Mt. Gox, the largest Bitcoin exchange.

Previously FinCEN responded to e-mail questions with a description of the administrative process:

You have requested clarification on a number of issues relating to FinCEN’s recently published guidance concerning the regulatory treatment of
virtual currencies.  See http://www.fincen.gov/statutes_regs/guidance/pdf/FIN-2013-G001.pdf/.   FinCEN makes available a number of resources to answer questions about its regulations and their applicability in specific circumstances, including a press office and a regulatory helpline (for more information, see http://www.fincen.gov/hotTopics.html), in addition to the text of the Bank Secrecy Act, FinCEN’s regulations, guidance documents of the kind that prompted your request for clarification, frequently asked questions about a variety of pertinent topics, and administrative rulings responding to requests about the applicability of FinCEN regulations in specific factual circumstances.  If the more general resources that FinCEN has made available don’t adequately answer your questions in this case, you may wish to consider requesting an administrative ruling.  An explanation of the process for making such a request and of the legal significance of such a ruling can be found in FinCEN’s regulations at 31 CFR Part 1010, Subpart G (http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&SID=2440152cb966a4be2bab5b29ecedb5cc&rgn=div5&view=text&node=31:3.1.6.1.2&idno=31#31:3.1.6.1.2.7).

The problem with Bitcoin  mining comes in with the FinCEN guidance that claims:

A person that creates units of convertible virtual currency and sells those units to another person for real currency or its equivalent is engaged in transmission to another location and is a money transmitter.

But the rules that govern FinCEN state:

The term “money transmission services” means the acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency to another location or person by any means. …

Since the coins were created during mining it is not possible to have accepted them from another person.

Also see:

Buying a Bitcoin Miner – The Long Journey is Almost Over
Avalon ASICs Bitcoin Miner Operation
Bitcoin Mining – What’s it all About?
What is Bitcoin Mining Doing?
Electricity Usage of Bitcoin Mining
Bitcoin Mining Profitability Calculator
Bitcoin Mining Profitability – An Example

Below is the full request.  Note that if you are starting a business or are involved in a situation where clarifications could involve large sums of money an attorney should file a much more detailed legal argument than this.  Normally they would review the previous clarification responses and court decision and provide a detailed legal argument.


Request for administrative ruling pursuant to 31 CFR Part 1010, Subpart G:

(1) A complete description of the situation for which the ruling is requested,

I operate a company, Atlantic City Bitcoin, LLC.  Bitcoin mining machines were purchased and are now operating “mining” Bitcoins. I am seeking clarification to determine if these activities are exempt from registration as a Money Services Business (MSB)

These activities are further described at:

 http://cointext.com/bitcoin-mining-profitability-an-example/

(2) A complete statement of all material facts related to the subject transaction:

Bitcoins have been mined by Atlantic City Bitcoin, LLC but not yet used or transferred.  They may be used to purchase goods and services, used to convert to US Dollars, or transferred to an individual owning the business.

Bitcoin mining involve creating but Bitcoin miners do not have the ability to redeem (to withdraw from circulation) bitcoins.

(3) A concise and unambiguous questions to be answered,

Is Atlantic City Bitcoin required to register as an MSB as a result of the mining activities described above:

-If the mined Bitcoins are used to purchase goods or services?

-If the mined Bitcoins are converted to US dollars and spent on goods, services?

-If the mined Bitcoins are transferred to the owner of the business?

(Note that converting to US Dollars means transferring to a Bitcoin exchange that is a registered MSB, having the bitcoins converted to US Dollars, and having those funds transferred to a bank account)

(4) A statement certifying, to the best of the requestor’s knowledge and belief, that the question to be answered is not applicable to any ongoing state or Federal investigation, litigation, grand jury proceeding, or proceeding before any other governmental body involving either the requestor, any other party to the subject transaction, or any other party with whom the requestor has an agency relationship,

I certify, to the best of my knowledge and belief, that the question to be answered is not applicable to any ongoing state or Federal investigation, litigation, grand jury proceeding, or proceeding before any other governmental body involving either the requestor, any other party to the subject transaction, or any other party with whom the requestor has an agency relationship.

(5) A statement identifying any information in the request that the requestor considers to be exempt from disclosure under the Freedom of Information Act, 5 U.S.C. 552, and the reason therefor,

None

(6) If the subject situation is hypothetical, a statement justifying why the particular situation described warrants the issuance of a ruling,

The issue of disposing of the Bitcoins is hypothetical at this point. However, since Bitcoins have already been mined they will be disposed of in one or more the methods described.   Clarification is needed to ensure compliance with the various rules.

(7) The signature of the person making the request, or

See Below

(8) If an agent makes the request, the signature of the agent and a statement certifying the authority under which the request is made.

N/A

(8)(b) A request filed by a corporation shall be signed by a corporate officer and a request filed by a partnership shall be signed by a partner.

Requestor is the owner of the business.  Signature below.

(8)(c) A request may advocate a particular proposed interpretation and may set forth the legal and factual basis for that interpretation.

31 CFR § 1010.100(ff)(5)(i)(A) states in part:

The term “money transmission services” means the acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency to another location or person by any means. …

However FIN-2013-G001 states:

By contrast, a person that creates units of convertible virtual currency and sells those units to another person for real currency or its equivalent is engaged in transmission to another location and is a money transmitter.

The FIN-2013-G001 is incorrect because when bitcoins are mined (created) and then transferred to an exchange bitcoins are not accepted from one person and transmitted to another location or person [emphasis added].  Since the coins were created during mining it is not possible to have accepted them from another person.

Further, Bitcoin miners are not defined as “administrators” in FIN-2013-G001 since Bitcoin miners do not have the ability to remove bitcoins from circulation, only to add bitcoins.  Since Bitcoin miners are not Administrators or Exchangers the only other possible definition left is “User.” Therefore, Bitcoin miners are exempt from registering as an MSB.

 


 

 

 

Bitcoin Mining Profitability – An Example

There is quite a bit of hype about Bitcoin mining and the profitability.  This post will track the profitability of ordering Avalon ASICs Bitcoin Miners.  Keep in mind that the situation changes rapidly and ordering a Bitcoin miner has generally involved making a preorder and waiting months for delivery.  Developing new hardware can de difficult and predicting the difficulty changes in the Bitcoin network is also difficult.  This makes investing in Bitcoin miners more of a gamble than an investment.

Currently, there is a large amount of hype around Bitcoin miners and many are predicting losses if you order during the hype.

The one question that is remaining is how much profit is there?  Atlantic City Bitcoin will open its book to provide an example.

Units purchased:

Feb 2  – 2 units purchased (3 module, 65GigaHash/s per machine) 151.36 BTC    USD value $3,000 with Bitcoin around $20)

Feb 3 – 1 unit (3 module, 65GigaHash/s) 75.49 BTC  USD value $1500

March 25 – 2 units (4 module, 85GigaHash/s) 206.49 BTC   USD value $15,000 (This is not a typo, it is due to the price increase in BTC to about $72)

Total spent 433.34 BTC  which was $19,500 based on the exchange rates at the time of the purchases.

The first 2 units were delivered May 20, 2013 but were only partially operational until the next day when the Ethernet port bug was discovered.

Since then the units have been hashing mostly via Slush’s Pool.  payments are sent when the balance goes above 1 BTC  Here are the payouts:


Total Mined (Updated Real Time)      BTC

To see the transactions:   1BvCSM6bzorihPrb8yCXvdsd7FpD7KfyvC

Some calculate “break even” based on dollar value while other just look at the total number of bitcoins.

Note that the “difficulty”, which is how difficult it is to solve the problem updates about every 2 weeks and it depends on how many other people are mining.  The difficulty changes to ensure the average time between blocks is 10 minutes.


May 21 – 2.25 BTC – Partial day, received in afternoon. Estimate 20 kW-h used.  Difficulty is 11,187,257.
May 22 – 5.53 BTC – Partial day, bugs fixed in the morning.  30kW-h estimate for full day operation.
May 23 – 5.43 BTC – 13.22 BTC total.  Cash Value of Unit 1 ($1500) recovered.  3% of the 433.34 BTC recovered
May 24 – 7.33 BTC – Rewards vary depending on how many blocks are found (statistical variance).
May 25 – 6.27 BTC – 26.82 BTC total.  Cash Value of Units 1 & 2 ($3000) recovered.  Difficulty change: 12,153,411 block 237888.

1 Block 237,921 Found

May 26 – 4.81 BTC – 170 kW-h used.
May 27 – 5.27 BTC – 36.88 BTC total.  Cash Value of Units 1, 2 & 3 ($4500) recovered.  8.5% of the 433 BTC recovered.
May 28 – 5.34 BTC – Tracking received for Unit #3.
May 29 – 3.90 BTC – 46.09 BTC total.  10% of the 433 BTC recovered.
May 30 – 3.60 BTC – 290 kW-h used.  Additional fans now needed due to rising temperature.
May 31 – 5.27 BTC – 55 BTC Total.  12.5% of the 433 BTC recovered.  320 kW-h used for May $26.21.
June 1 –   4.91 BTC – FinCEN Ruling Requested for Bitcoin Mining
June 2 –  4.71 BTC – 64.62 BTC total.  380 kW used so far.
June 3 – 6.57 BTC.  Unit 3 arrives.  Online in less than 30 minutes after delivery. 45 kW-/day.
June 4 – 8.82 BTC – 80 BTC Total.  BTC value of unit 1 recovered.  18% of the 433 BTC recovered.
June 5 – 9.33 BTC – Difficulty change +28% to 15,605,632 block 239,904. Ambient temp 95º F with room exhaust fan off.

2 Block 239,897 Found just before difficulty increase.

June 6 – 9.42 BTC – 98.75 BTC Total.  555 kWatt-hours used so far (plus more for running fans).

3 Block 240,045 Found
4 Block 240,066 Found

June 7 – 6.52 BTC – 105.27 BTC Total.
June 8 – 7.27 BTC – 112.54 BTC Total.  Cash value of Units 1,2, 3 and 4 recovered.  25% of the 433 BTC recovered.
June 9 – 3.77 BTC
June 10 – 6.30 BTC
June 11 – 6.64 BTC – 129.25 BTC total.   29% of 433 BTC recovered.

5 Block 240,865 Found

June 12 – 6.19 BTC

6 Block 241,071 Found

June 13 – 6.21 BTC.  141.65 BTC total.  32% of 433 BTC recovered.
June 14 – 6.67 BTC.

7 Block 241,518 Found

June 15 – 4.75 BTC.  153.07 BTC total.  BTC cost of Units 1 and 2 recovered.  35% of 433 BTC recovered.

8 Block 241,749 Found

June 16 – 4.13 BTC.  Difficulty change +24% to 19,339,258.
June 17 – 4.68 BTC.  161.88 BTC total.  37% of 433 BTC recovered.
June 18 – 4.65 BTC.
June 19 – 3.72 BTC.
June 20 – 4.90 BTC.  175.15 BTC Total.  40% of 433 BTC Recovered – 1 month
June 21 – 6.36 BTC.  181.37 BTC Total.  Cash value of all 5 units recovered.
June 22 – 4.72 BTC.  New Firmware released.  Hack allows overclocking from 300 –> 350 adding 17% hashing power.
June 23 – 5.39 BTC.  191.49 BTC Total.  44% of 433 BTC Recovered.

9 Block 243,006 Found

June 24 – 6.83 BTC

10 Block 243,048 Found
11 Block 243,113 Found

June 25 – 9.73 BTC  – Power supply stopped working.  Upgrade from 650W -> 800W fixed it.
June 26 – 5.78 BTC
June 27 – 3.54 BTC.  217.37 BTC Total.  50% of 433 BTC Recovered.
June 28 – 5.81 BTC.  Bugs becoming a problem.  Outdoor bug zapper ordered as well as a Bugzooka.

12 Block 243,819 Found

June 29 –  7.06 BTC.  Difficulty increased +10%  to 21335329.

13 Block 244,083 Found

June 30 – 7.64 BTC.  237.88 BTC Total.   BTC cost for units 1, 2 and 3 recovered.
July 1 – 5.39 BTC.
July 2 – 5.56 BTC.  248.83 BTC total.  57% of 433 BTC recovered.

14 Block 244,462 Found

July 3 – 5.47 BTC
July 4 – 5.88 BTC
July 5 – 4.79 BTC
July 6 – 3.80 BTC
July 7 – 6.60 BTC
July 8 – 4.90 BTC
July 9 – 5.81 BTC.  286.08 BTC total.  66% of 433 BTC recovered.
July 10 – 5.81 BTC.  Difficulty change +22.6% to 26,162,876
July 11 – 2.15 BTC.
July 12 – 1.46 BTC.
July 13 – 4.10 BTC.   299.63 BTC Total.  69% of 433 BTC recovered.
July 14 – 3.63 BTC
July 15 – 3.86 BTC
July 16 – 3.60 BTC

15 Block 246,851 Found

July 17 – 4.54 BTC

16 Block 247,074 Found

July 18 – 4.08 BTC
July 19 – 4.74 BTC
July 20 – 2.62 BTC.  326.71 BTC Total.  75% of 433 BTC recovered.
July 21 – 5.55 BTC.
July 22 – 3.38 BTC.  335.64 BTC Total.  BTC value of units 1-4 recovered.
July 23 – 6.15 BTC. Difficulty increased 19.4% to 31,256,961

17 Block 248,074 Found

 July 24 – 4.62 BTC.  346.41 BTC Total.
July 25 – 3.82 BTC.
July 26 – 3.49 BTC.
July 27 – 5.42 BTC.  359.15 BTC Total.  82% of 433 BTC recovered.
July 28 – 2.17 BTC.
July 29 – 3.49 BTC.
July 30 – 3.53 BTC.

18 Block 249,149 Found

 July 31 – 3.39 BTC.  Difficulty increase 19.6% to 37,392,766
Aug 1 – 5.30 BTC. 381.77 BTC total.  88% of 433 BTC recovered.
Aug 2 – 3.59 BTC.


Electric charges to run an Avalon is about $1.25/day (plus room cooling if needed).
$26.21 – May Electric Charges 8.19 cents/kWatt-hour
$124.20 – June Electric costs

$750 – Installation of 3 240V Electrical lines with NEMA 6-20 receptacles:

$292.81 – Power Strip NEMA 6-20:

$35.25 – Fan

$106.99 – Power Supply.

 

Electric Bill – winter Rates/Summer rates (June-September) :

Distribution Charge:  $0.032558/0.042658
Market Transition:     0.003372
Transition Bond Charge:  0.005969
Non-Utility Generation Charge:  0.023330
Societal Benefits Charge: 0.008346
RGGI Energy Efficiency  0.000186
System Control Charge:  0.000011
Regulatory Assets Recovery:  0.000285
Transmission Service Charge: 0.010142

Excess Depreciation Reserve Credit -0.002344
____________________________________

Cost of Electricity:  8.19 (October – May) | 9.20 (June-September) cents per kWatt-Hour

Electricity costs of an Avalon is about $1.20/day winter | $1.33/day Summer.

 

For more information about Bitcoin mining see:

Buying a Bitcoin Miner – The Long Journey is Almost Over
Avalon ASICs Bitcoin Miner Operation
Bitcoin Mining – What’s it all About?
What is Bitcoin Mining Doing?
Electricity Usage of Bitcoin Mining
Bitcoin Mining Profitability Calculator
FinCEN Ruling Requested for Bitcoin Mining

 


avalon4   avalon3