The Ore Detector would detect ore within a 10 block radius of you in exchange for a piece of raw ore (raw iron, raw gold, etc) that you've already found and mined. This would also work like a furnace and would burn the ore placed inside the device for a while and then burn out. It would alert you by glowing said ore's color when said ore is close by, glowing brighter and brighter as you get closer. Crafting Recipe would be similar to a compass/watch, but also like making TNT. It would be redstone in an X shape and gold in the remaining open slots. Sound like a good idea?
I don't think this is overpowered. Using this to find diamonds would be absolutely ubsurd since you would need a block of diamond ore which you can only get by mining diamond with silk touch pick. Also it only detects in a 10 block radius so with the rarity of diamonds more then half the time you wouldn't find a diamond vein and thusly have lost a diamond ore block in the process. However you could make the crafting recipe more demanding by requiring the 6 ore blocks (coal, iron, gold, lapis, redstone, and diamonds) in the bottom 6 spots and then 3 redstone dust at top.
Agreed with marm, in the end of the day, diamond has a fair bit of spacing between eachother, and half the time, it wouldn't even work as there is no diamond within 10 block radius.
Still, it sounds like too much programming just for a cool little gadget that doesn't really fit in well with a kind of medieval-esque game.
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I actually don't think that this would make mining too easy like most people do. Instead, I think it would be almost useless. Think about it. It requires you to waste pieces of the ore you are looking for, increasing the amount you need to mine to do anything. In exchange for this, you get something that tells you when you're near to ore...which may not even be in enough quantity to replace what you spent mining it. Finally, all else aside, either the detection range would be so large that it would be useless for pinpointing ore locations, or else so small that you'll be on top of the ore already, and could probably have just found it yourself without "help" from the detector.
Ore Detector