Anti-mining movement with their own agenda READ ON

molecular

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Quote from: steelhouse on April 30, 2011, 11:36:56 AM

Quote from: allinvain on April 28, 2011, 09:09:27 AM

I personally don't give a damn if new miners join the game. If they wish to run at a loss that's their personal choice and their right. I do think that the majority of them will leave the mining game once they see that the $80 extra on their power bill has earned them only a meager 5 BTC.

That is a complete joke. You put 2 5970 cards in a computer. That is a 1.3 Gh/s system. The electricity to run that at $0.10 per kw-hr (600W x 24 x 30 x .1) = $43.20 per month electricity. You will be generating presently 11 BTC every day. You will pay the electricity off in 2 days!

It is a great time to upgrade to a new computer system, if your computer is less than 2 gz, why not upgrade to a new computer and have an income of $15 a day that is far more than the payments.

make that € 0.20 ($0.3) / kWh where I live and maybe a lot more when we power off our nuclear plants... well, I see mining rigs shipped to other parts of the world.

Your point is still valid, even at $0.30/kWh.

proudhon

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Quote from: steelhouse on April 30, 2011, 11:36:56 AM

Quote from: allinvain on April 28, 2011, 09:09:27 AM

I personally don't give a damn if new miners join the game. If they wish to run at a loss that's their personal choice and their right. I do think that the majority of them will leave the mining game once they see that the $80 extra on their power bill has earned them only a meager 5 BTC.

That is a complete joke. You put 2 5970 cards in a computer. That is a 1.3 Gh/s system. The electricity to run that at $0.10 per kw-hr (600W x 24 x 30 x .1) = $43.20 per month electricity. You will be generating presently 11 BTC every day. You will pay the electricity off in 2 days!

It is a great time to upgrade to a new computer system, if your computer is less than 2 gz, why not upgrade to a new computer and have an income of $15 a day that is far more than the payments.

The power consumed at the socket for a dual 2x5970 system will be more than 600W.

molecular

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Quote from: ribuck on April 30, 2011, 11:36:34 AM

Quote from: molecular on April 29, 2011, 09:52:54 AM

In short: I think entering mining biz with brand-new HW is still profitable nowadays, but simply buying bitcoin might be 3 times as profitable.

Noting beats the buzz you get when you see the message "Generated 50 Bitcoins" in your client!

Hmmm, a buzzer. Maybe a cop-style flashing light. You just gave me an idea...

* molecular whips out soldering iron with fat grin

molecular

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Quote from: TurboK on April 30, 2011, 11:24:46 AM

Quote from: molecular on April 29, 2011, 09:52:54 AM

Quote from: Ian Maxwell on April 28, 2011, 09:18:37 AM

Once spending $80/month on electricity isn't profitable, I'll spend $80/month on bitcoins instead!

In retrospect, instead of buying mining rig in January for 700€ and putting 200€ power into it so far, I would've been better off investing in coins right from the start (which my calculations showed, but I wanted to mine for other reasons, too (it's cool and secures bitcoin)).

In retrospect, I should've put the winning numbers on the lottery instead of all the others.

It wasn't like that. ("which my calculations showed"). So I knew (or rather assumed) mining would be less profitable. I consciously decided to go for mining instead of buying because "it's cool and secures bitcoin".

Also: I said "I would've been better off" and not "I should've".

Sorry for nitpicking Wink

steelhouse

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Quote from: allinvain on April 28, 2011, 09:09:27 AM

I personally don't give a damn if new miners join the game. If they wish to run at a loss that's their personal choice and their right. I do think that the majority of them will leave the mining game once they see that the $80 extra on their power bill has earned them only a meager 5 BTC.

That is a complete joke. You put 2 5970 cards in a computer. That is a 1.3 Gh/s system. The electricity to run that at $0.10 per kw-hr (600W x 24 x 30 x .1) = $43.20 per month electricity. You will be generating presently 11 BTC every day. You will pay the electricity off in 2 days!

It is a great time to upgrade to a new computer system, if your computer is less than 2 gz, why not upgrade to a new computer and have an income of $15 a day that is far more than the payments.

ribuck

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Quote from: molecular on April 29, 2011, 09:52:54 AM

In short: I think entering mining biz with brand-new HW is still profitable nowadays, but simply buying bitcoin might be 3 times as profitable.

Noting beats the buzz you get when you see the message "Generated 50 Bitcoins" in your client!

TurboK

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Quote from: molecular on April 29, 2011, 09:52:54 AM

Quote from: Ian Maxwell on April 28, 2011, 09:18:37 AM

Once spending $80/month on electricity isn't profitable, I'll spend $80/month on bitcoins instead!

In retrospect, instead of buying mining rig in January for 700€ and putting 200€ power into it so far, I would've been better off investing in coins right from the start (which my calculations showed, but I wanted to mine for other reasons, too (it's cool and secures bitcoin)).

Back then price was 0.4USD, 1 USD was around 0.7 USD, so my 900 EUR where (900/0.70)/0.4 = 3,214 BTC, which would now be roughly 3,214 * 2.5 = 8,035 USD = 5,880 EUR. Minus the investment I would've made 4,980 EUR by now.
I only mined 1,500 BTC (2,512 EUR) so by buying brand-new mining rig, I actually made a profit of "only" 1,612 EUR, 32% of what I would've made by buying bitcoin.

In short: I think entering mining biz with brand-new HW is still profitable nowadays, but simply buying bitcoin might be 3 times as profitable.

In retrospect, I should've put the winning numbers on the lottery instead of all the others.

allinvain

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Quote from: ?? on ??

Quote from: allinvain on April 30, 2011, 09:59:17 AM

If you make a profit from trading bitcoins your earning are still taxable - should you choose to report them. Bitcoin trading is much the same as forex trading (something I'm deeply into) so for me I treat it the same from a "paying taxes" point of view.

It's not exactly the same; the details are complicated. Are you confident you can make a section 988 election, for example? If you're just taking all gains as ordinary income, that should at least be an unobjectionable treatment under the code. (Again, that's not personal tax advice and you shouldn't rely on it!)

Mining, on the other hand, might require the payment of self-employment taxes in the US. That's in fact how I expect to declare any income I have from mining. With mining, the timing of recognition is the tougher question.

Hmm, well mining yes it would be classified as self-employment because you are deploying capital (mining rigs) for the purpose of producing income.

I plan to treat the income as plain regular income from non employment sources. If bitcoins were classified as securities I'd have to pay a capital gains tax too. Bear in mind I'm not in the United States. But for US Citizens this bit of info may prove useful:

"some forex transactions are categorized under Section 1256 contracts while others are treated under the Section 988 – the Treatment of Certain Currency Transactions.

Section 1256 provides a 60/40 tax treatment which is lower compared to its counterpart. By default, all forex contracts are subject to the ordinary gain or loss treatment. Traders need to “opt-out” of Section 988 and into capital gain or loss treatment, which is under Section 1256."

Ian Maxwell

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I'd assume that selling bitcoins for more US dollars than they're bought for is subject to capital gains tax. But then, selling them for less than they're bought for is subject to a tax credit for capital loss. Mining would probably be treated as self-employment. You could declare it if you like, but be sure to write off your mining rig as well.

Disclaimer: I'm just some guy on the internet, don't listen to anything I say.

allinvain

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If you make a profit from trading bitcoins your earning are still taxable - should you choose to report them. Bitcoin trading is much the same as forex trading (something I'm deeply into) so for me I treat it the same from a "paying taxes" point of view.

proudhon

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Quote from: molecular on April 29, 2011, 09:52:54 AM

Quote from: Ian Maxwell on April 28, 2011, 09:18:37 AM

Once spending $80/month on electricity isn't profitable, I'll spend $80/month on bitcoins instead!

In retrospect, instead of buying mining rig in January for 700€ and putting 200€ power into it so far, I would've been better off investing in coins right from the start (which my calculations showed, but I wanted to mine for other reasons, too (it's cool and secures bitcoin)).

Back then price was 0.4USD, 1 USD was around 0.7 USD, so my 900 EUR where (900/0.70)/0.4 = 3,214 BTC, which would now be roughly 3,214 * 2.5 = 8,035 USD = 5,880 EUR. Minus the investment I would've made 4,980 EUR by now.
I only mined 1,500 BTC (2,512 EUR) so by buying brand-new mining rig, I actually made a profit of "only" 1,612 EUR, 32% of what I would've made by buying bitcoin.

In short: I think entering mining biz with brand-new HW is still profitable nowadays, but simply buying bitcoin might be 3 times as profitable.

Yeah, I wish I wouldn't just bought bitcoin when I decided to set out mining. It was 1.18USD/BTC at the time, but the whole project was too new to me and I wasn't as confident in it as I am now. Plus, the nerd factor of setting up a dedicated mining rig really pulled me in too.

JJG

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Difficulty just jumped 19% 12 hours ago, and the projected difficulty jump for the next round on Bitcoin Charts (not sure if it's stabilized yet or not) is 33% in 1937 blocks.

At the current block rate, the next difficulty jump will come in only 10.3 days. As people join in, production will speed up more and that will push the next difficulty jump even closer.

For miners, this means that if the 33% difficulty jump predicted by Bitcoin charts holds true, then 10 days from now your BTC output will be 63% of what it was a couple days ago.

Take a look at how popular the Bitcoin thread was on overclock.net in the 2 days before it got closed. People who were lusting after 6990s ran some quick calculations and used those to justify their purchase. Many of those people bragged about how they don't pay for electricity, so they can justify mining no matter how little BTC it brings in. These guys are the future of mining.

Many people keep arguing that you can count on the exchange rate to keep going up with difficulty. While I strongly doubt that for many reasons, if you truly believe that then you shouldn't be buying hardware anyway. You should be buying bitcoins.

phelix

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molecular: +1

molecular

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Quote from: Ian Maxwell on April 28, 2011, 09:18:37 AM

Once spending $80/month on electricity isn't profitable, I'll spend $80/month on bitcoins instead!

In retrospect, instead of buying mining rig in January for 700€ and putting 200€ power into it so far, I would've been better off investing in coins right from the start (which my calculations showed, but I wanted to mine for other reasons, too (it's cool and secures bitcoin)).

Back then price was 0.4USD, 1 USD was around 0.7 USD, so my 900 EUR where (900/0.70)/0.4 = 3,214 BTC, which would now be roughly 3,214 * 2.5 = 8,035 USD = 5,880 EUR. Minus the investment I would've made 4,980 EUR by now.
I only mined 1,500 BTC (2,512 EUR) so by buying brand-new mining rig, I actually made a profit of "only" 1,612 EUR, 32% of what I would've made by buying bitcoin.

In short: I think entering mining biz with brand-new HW is still profitable nowadays, but simply buying bitcoin might be 3 times as profitable.

JJG

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Quote from: Meni Rosenfeld on April 29, 2011, 08:50:54 AM

Quote from: JJG on April 29, 2011, 08:22:10 AM

Depreciation is the declining value of your hardware over time. If you buy a $700 video card and the going price on eBay or craigslist or gaming forums is $500, then you have a 'cost' of $200 that you need to account for. This cost goes up over time.

Unless you're already buying the hardware for other purposes (e.g. gaming) then these costs are very real and can't be ignored.

If you count depreciation, you can't also count the original cost of purchasing the hardware.

You guys are missing the point. You can look at your 'balance' like this:

Initial hardware cost - electricity cost + resale value + (mining income - withdrawal fees)

OR

(Mining income - withdrawal fees) - depreciation - electricity cost

I'm not trying to double-count depreciation and the hardware cost. However you setup your equation, the outcome is the same.

Meni Rosenfeld

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Quote from: JJG on April 29, 2011, 08:22:10 AM

Depreciation is the declining value of your hardware over time. If you buy a $700 video card and the going price on eBay or craigslist or gaming forums is $500, then you have a 'cost' of $200 that you need to account for. This cost goes up over time.

Unless you're already buying the hardware for other purposes (e.g. gaming) then these costs are very real and can't be ignored.

If you count depreciation, you can't also count the original cost of purchasing the hardware.

JJG

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Quote from: AmpEater on April 28, 2011, 10:22:42 PM

Quote from: JJG on April 28, 2011, 03:00:12 PM

If your $3000 + $151/month rig can churn out 2100MH/sec, Bitcoins remain at 2.3:1, and difficulty increases slow down (unlikely) to 10%/period, then my model has you breaking even on your original purchase at month 8.5, after which your $151/month electricity bill overwhelms your income. Add hardware depreciation costs to that, and you never break even. Use 15% difficulty increases (following the latest trend) and you never come close. If BTC:USD falls below the current 2.3:1, you're completely out of luck.

This makes no sense; you write-off the cost of the miner completely right off the bat ($3000)....and then say "Add hardware depreciation costs to that". Uhhh, what is that $3000 exactly?

Depreciation is the declining value of your hardware over time. If you buy a $700 video card and the going price on eBay or craigslist or gaming forums is $500, then you have a 'cost' of $200 that you need to account for. This cost goes up over time.

Unless you're already buying the hardware for other purposes (e.g. gaming) then these costs are very real and can't be ignored.

Littleshop

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Difficulty does not drive price, price drives difficulty. Right now bitcoins are going up in price because more people are using them. If interest continues price will continue to rise. When price is steady, difficulty will rise until it nears a place where mining is only marginally or not at all profitable for people with average electricity.

AmpEater

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Quote from: JJG on April 28, 2011, 03:00:12 PM

If your $3000 + $151/month rig can churn out 2100MH/sec, Bitcoins remain at 2.3:1, and difficulty increases slow down (unlikely) to 10%/period, then my model has you breaking even on your original purchase at month 8.5, after which your $151/month electricity bill overwhelms your income. Add hardware depreciation costs to that, and you never break even. Use 15% difficulty increases (following the latest trend) and you never come close. If BTC:USD falls below the current 2.3:1, you're completely out of luck.

This makes no sense; you write-off the cost of the miner completely right off the bat ($3000)....and then say "Add hardware depreciation costs to that". Uhhh, what is that $3000 exactly?

MoonShadow

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The difficulty seems to follow the 6 week moving average of the price very closely, so as the value of the bitcoin rises the difficulty increases with a lag. If this holds true, your predictions about the rise of difficulty is irrelevent.

Topic: Anti-mining movement with their own agenda READ ON (Read 8504 times)