Topic: A Reality Check (Read 5275 times)

My spreadsheet estimates predict 60 days.  But that is at $20/bitcoin.  They may go up and extend net loss point out.  But still, it would have been better to buy bitcoins directly.

I know. Every time I read about someone saying that mining will be profitable for them because their parents or someone else pays electricity, I laugh and think of this. I haven't lived with my parents since I was 17 years old, but I know that when I did, if the electricity bill went up by more than $20 they would start asking questions. $100 increase, which is about what you'd see in a lot of peoples' setups, and my parents would have flipped out.

If you want to become anti-competitive you could always contact the dorms at big schools and tell them why their electricity bills are climbing.

Until your landlord gets the first $500 electric bill -- beware, your electricity arrangement could change real quick.

Same goes for all the kiddos in Mom's basement -- wait till Mom gets an electric bill for $400 instead of the usual $200 -- times aren't exactly booming out there in the economy -- money is tighter for pretty much everyone, even upper-middle class.

I pay fixed electricity bill @ $10 fortnight and my landlords cant meter my usage so I essentially pay 0 for electricity

Plus This is a great fulltime hobby atm for me

So i'd say I will outlast most of the peeps just in it for cash easily

One thing you have to keep in mind -- scarcity does NOT make something valuable in dollars. People have to WANT THEM as well.

If scarcity were the only factor, then my fingernails would be worth $200/ounce. After all, there's only one of me, and I can only produce so many fractions of an ounce of fingernail per week!

So you see, there's more to it than just difficulty.  I know, Bitcoins are cool, but there are still *major* obstacles to widespread adoption.

A smart poster on here brought it up a while ago -- he called it the "parents test". Here's how it works: You tell your parents about Bitcoin. Then you leave them with the request, "Now buy some Bitcoin". NOT do it for them. NOT stand over their shoulder as they buy some. Just tell them to buy some! Report back here how it goes. Hopefully I'll be pleasantly surprised.

But think about it: Many of us clever PC techs, programmers, etc. had to read up on how Bitcoin works for a day or two before we (mostly) understood it. Do you think an old Baby Boomer who types e-mails in ALL CAPS is going to want to buy and use Bitcoin?
Sadly, I doubt it.

Matthew

Except I've had problems *several times* with OC'd cards crapping out when they get any kind of hot. It's true that cards are more sensitive to heat when you OC.

Just wanted to say, that is NOT overheating. Newer cards can happily blaze along at 90C without detriment.

It's funny and most excellent, that I was aiming to buy a 2nd computer in June, so that I could have them both botting, but one as a WoW golf farmer, and the other Poker botting

Then I discovered Bitcoin, then Namecoins, now I am $1 up and I have 3 new computers full paid for.

So, once this ends, I'll have 2 machines poker botting, and 2 machine WoW gold farming

Thank you BTC and NMC people

This is oversimplified. The difficulty is not going to stay at 877k for the next 43 days. It is likely still going to shoot up by a large percentage every 6-10 days for the foreseeable future.

Also, given the continued deteriorating economies of the western world, it is seeming less and less likely that, in a few months time you would make as much back if you had to sell these as gaming PCs (although would these work as good gaming rigs if only the video card and PSU were upgraded?)

RIGHT.

Its really hard to be able to look into the future with a crystal ball. But, at least with bitcoins, it seems like we have a clearer picture than most "economic" phenomenon

At the end of the day, the price per bitcoin is going to end up pairing with how difficult it is to get them, and how much people want them.
Its simple supply and demand.

So right now, as we speak, there's MORE supply than there will be later. That's a fact.

Assuming the demand stays the same, that alone would increase the price.
The tightening of supply increase, with stable demand = bitcoins +

What will happen is those that give up mining will sell their rigs
Some will sell their rigs for bitcoins + demand

Some will sell their rigs for cash. X amount of those people will convert some of that money into bitcoins to

Continue as part of the community + demand
to simply speculate prices and still try to make money +demand

What number is that X? I don't know. But its more than ZERO. And can only be beneficial for the bitcoin.

perfectcoice4u, what about the fact that difficulty will change few days after you will get your rig online and running and your daily profit will immediately drop from $55 to $46, plus you didn't include your cheap electricity in your formula, not to mention that you won't be able to run this 100% of the time. So your 43 days just turned into 52 days not to mention the difficulty will increase 3 more times in the meantime, making it hardly possible to ever get all this costs back. All this while assuming bitcoin price stays at $15 while majority is eying $8-10 area in the near future.

At the rate that difficulty is growing, once you've broken even in eight weeks, you don't really stand to profit much more... by the end of August you'll have mined 82.4% of the perpetuity.

I decided to get into the bitcoin mining business recently, and have other bitcoin projects going.
I should be coming online to about 3.2ghash's in about a week, this cost me $4400

The only problem I see is with scale, and your cost of electricity. But really, the electric only matters as to when u get to your breaking even point. Maybe I'm just lucky my electrics low, 8c a kw hr at peak

The way I see it, its 8 weeks to break even on equipment if bitcoins stay at $15-20 a piece.

And really, when it comes to "breaking even" you also have to factor in being able to sell the machines too. I'm sure i could get $500 per pc with a ATI 6970 in it (yeah i know i should have gotten a different cheaper card live and learn), but thats 8x500=$4,000

So, really I only have to make $400 before I "break even"

Now I got kinda lucky because i had 8 pc's laying around. But u can get a cheap $200 dollar old computer and pay the $550 I paid per cheap Pc (power supply, video card, I got some other stuff put in too that was unneeded). So say total you pay $750 per machine, that you can realistically resell for $500. But lets say you want to be conservative, and say $450 a machine resale on CL, eBay, etc

So your looking at $750x8 (in my case), and your getting 3.2ghash/s. Total you paid $6000. Selling them off fire sale prices you can get $3600 back meaning you need to make only $2400 to "break even", not $6k

3.2ghash's @ $15 a bitcoin @ 877226.666667 is $1,673.09 per http://www.alloscomp.com/bitcoin/calculator.php
$1,673.09 divided by 30 = $55.75
$2400 divided by $55.75 = 43.wholebunchofnumbers days

So if u wanted to step into the market today with $6,000 after 43 days u would be pure profit to the tune of $390 a week

Mind you, I've overstated expenses, and understated earnings and prices u can receive too make WORST CASE SCENARIOS

The matter is scale. 400mhash's is a piss in the pot. I only got 3.2g as a starter to see how it goes, but if it goes well I will be scaling.

Even if you bought your 5830 for $109.99, you would not get there in a month @ only $2.95 a day. Check the math again.

I specifically said you CAN'T multiply by 30 to get your "monthly income" because that fails to take into account DIFFICULTY INCREASES which have been a fact of life in "this era" which is the one we live in today. We can't go back to April or May 2011, just like we can't go back to 2010 and mine dozens of bitcoins a day with a CPU

The fact is, the genie is out of the bottle, the cat is out of the bag, and Bitcoin isn't a secret anymore. If difficulty went down just a bit, people would hurry up and start mining -- that wouldn't last for long.

Unfortunately for the miners (including myself), I think competition and growth will bring the profit/electricity cost ratio all the way down to 1:1 eventually. If there's money to be made, even only a little, people will take it because, as you say, it's easy money (after you factor in all the headaches!)

Just this evening I had one card that was overheating (=84 degrees or higher) which I had to solve, then while I was working on that my wife's machine (2 5870's) crapped out and "VPU recover" had to recover it -- it took the speed down to 850. I had it set at 875. I had some real cool temps on that rig, too -- don't know why Windows XP had a problem with it. Anyhow, there IS some work involved keeping the operation running. It's hardly "free money". I could spend the same hours doing something else which would probably make me far more. If you're talented enough to build, configure, set up and maintain your mining rigs (including Linux and installing various software) I'm sure you could make more than $50 for a couple hours' work...

Matthew

common sense would dictate that the price will quickly move to the lowest common denominator which is someone living where electricity is 'free' (dorm room, IT techs, kids in basement) etc, with people who dont factor in depreciation at all (gamer who would buy the graphics card anyway), and someone who values his time at 0$/hr (an enthusiast, someone who enjoys working on gaming rigs).

Factor in these 3 costs, 0$, 0$, and 0$.. and it takes very little to keep some sizeable hashing power online.  Consider 'folding@home' which reached 8 Petaflops with NO monetary incentive.  And I think you can see the future of bitcoin mining...

And people dont realize how quickly exponential decay destroys margins.

Please, if you live in the chicago area I have plenty of high end mobos, power supplies, radeon 6870's, i will sell at reasonable prices. 

That's one possibility of what will happen, but we've yet to see for sure whether difficulty will continue to scale that quickly.

$2.95 a day, but as the OP stated that gets reduced by a third every 10 days or so.  By the end of the month you're getting $1, not $3.

$2.95 a day means you paid for the card in 1 month. everything it makes after that is pure profit. and most people building mining rigs have at least 4 cards so thats almost $12 a day or $360 a month for sitting on your ass.