Mining BitCoins

Today I read an article called “Why you should care about BitCoin” with a quote that I want to repeat here:

 “Hackers are the animals that can detect a storm coming or an earthquake. They just know, even though they don’t know why, and there are two big things hackers are excited about now and can’t articulate why – Bitcoin and 3D printing”
– Paul Graham

In late June I ordered a KncMiner Saturn BitCoin mining machine. I knew that it would be delivered in October. What I didn’t know was how the difficulty for mining would develop. It was rising fast, exponentially fast. Nevertheless it was tempting to see, that if I received the miner when I ordered it, return on investment would have been reached in 9 days. In the months since I ordered the device, the network difficulty went through the roof. So at the moment it’s not even sure if I will reach a break even point for the investment. It was a substantial investment for me. But I won’t complain, it was less than what I gained just by holding onto some BitCoins, that I earned with paragliding tandem flights. The mining business appears even riskier than just investing in BitCoin. But in late spring it looked as if the BitCoin price would stabilize, which would be a good thing for BitCoin adoption. Thus mining seemed to be a good strategy to gain something. And on top of that, everybody heard the stories of the people who made a fortune through mining BitCoins.

Last wednesday, I received an eMail from DHL, that they picked up a packet for me in Sweden and that it is on it’s way to me. With the tracking number I could see where it was. The first part of the voyage was quite impressive, but then they couldn’t locate my home, which shouldn’t be that hard. So I had it delivered to the office a day later:

October 16, 2013 14:13 Vasteras - Sweden     Shipment picked up
October 16, 2013 19:35 Vasteras - Sweden     Processed at Vasteras - Sweden
October 16, 2013 20:57 Vasteras - Sweden     Departed from DHL facility in Vasteras - Sweden
October 16, 2013 22:40 Copenhagen - Denmark  Transferred through Copenhagen - Denmark
October 16, 2013 22:42 Copenhagen - Denmark  Departed from DHL facility in Copenhagen - Denmark
October 17, 2013 00:52 Leipzig - Germany     Arrived at DHL facility in Leipzig - Germany
October 17, 2013 01:08 Leipzig - Germany     Processed at Leipzig - Germany
October 17, 2013 04:40 Leipzig - Germany     Departed from DHL facility in Leipzig - Germany
October 17, 2013 06:35 Basel - Switzerland   Arrived at DHL facility in Basel - Switzerland
October 17, 2013 06:43 Basel - Switzerland   Processed for clearance at Basel - Switzerland
October 17, 2013 06:44 Basel - Switzerland   Clearance processing complete at Basel - Switzerland
October 17, 2013 06:46 Basel - Switzerland   Processed at Basel - Switzerland
October 17, 2013 07:58 Basel - Switzerland   Departed from DHL facility in Basel - Switzerland
October 17, 2013 09:06 Basel - Switzerland   Arrived at DHL facility
October 17, 2013 09:19 Basel - Switzerland   With delivery courier
October 17, 2013 16:46 Basel - Switzerland   Address information needed; contact DHL
October 18, 2013 09:36 Basel - Switzerland   With delivery courier
October 18, 2013 15:03 Basel - Switzerland   Shipment delivered

Usually when I look at the tracking,  the steps that take minutes or hours for DHL, would take days or weeks for stuff that comes from China with economy shipping.

When I opened the package, I noticed that something shakes inside the case. When I opened it, I saw that the fans had fallen off the big heat-sinks. So I re-mounted them before starting the device. The software came fully configured, so this part was plug n play. Over the first few hours it was hashing at approx 240 GH/s. When I ordered it, 200+ GH/s was promised, but they stated that 275 GH/s would be normal after the first prototypes. For comparison: a high-end graphics card hashes at about 0.3 GH/s. So I upgraded the firmware to get some more diagnostics. One core was always at 57°C while the other was always at 44°C. So I guessed there should be a way to make the one with the lower temperature work faster.

On the KncMiner forum, I found a firmware mod called BertMod that should offer more detailed diagnostic. It didn’t work with the newest firmware though. Fortunately I could de-compose it, and run the perl script in an ssh session to get the diagnostics. It showed that on the second chip there were about 40 cores disabled.

The next thing I found was the official EnableCores patch. As the name suggests, it enables all the cores in case they were disabled erroneously. Shortly after applying it, the hashrate went up to 260GH/s, but not for long. It stabilized at 250GH/s. And now, I get lots of messages like this:

KnC: core 4-xx was disabled due to 10 HW errors in a row

The technical support told me they are working on a new firmware to improve the performance.

Since solo mining is too risky for my taste at the moment, I am participating in pooled mining. My device should statistically find about 1.3 Blocks in it’s lifetime. But if I were unlucky, it could find nothing at all. When experimenting with GPU mining a while back, I used the 50btc pool. Thus, it was my first choice for the Saturn as well. But after a day or two, they were attacked by a DDoS and later also their billing server was hacked. Mining still worked, but the situation seemed a bit risky, so I looked for alternatives. At the moment I configured slush, bitminter, eligius and solo mining as failover alternatives. They have problems of their own, but these can be worked around:

• slush wouldn’t send confirmation emails to my regular account. So I had to use gmail.
• bitminter uses OpenId for logging in, which is great. But the first two OpenId’s that I tried, didn’t work with their site. They would provide additional security as they are self hosted or backed by a client certificate. So I had to use my launchpad.net OpenId, which is only secured with a password.
• eligius is based in the US