Topic: Anti-mining movement with their own agenda READ ON - page 2. (Read 8504 times)

You can't argue risk without bringing reward into the equation.

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.

Since I find it unlikely that difficulty will only increase at 10%/period, especially in the short term, your only hope is that the BTC:USD goes way up.

That's the same bet you would have made if you just bought BTC.

You are correct that your downside is limited in the extreme case (BTC:USD falls to 0, Bitcoin disappears, etc.) but you'd still be out the $1000 minimum you're going to lose on your hardware + $151/month for as long as you run your system.

If things stay neutral, then you might pay your hardware depreciation, electricity, and cooling bills with income.

If BTC:USD goes up, then your mining rig will briefly bring in more than electricity + depreciation are costing you, but that will fall as difficulty rises.

So you already bet on BTC:USD going up, but in this case you've severely limited your upside and locked in the downside.

How about bitcoins? how fast do they depreciate? can you give me a definite answer like you gave about video cards?
See what i mean? can you guarantee me that the bitcoins will depreciate fast like you guaranteed me the video cards would?
if you cant then you just proved that you can indeed rely on hardware to hold a certain price, but you cant on bitcoins, hence buying a rig rather than trading is less risky.

I wouldn't bet on that. 5970s were selling for $699 not too long ago, and you can now pick them up for a bit over $400. When the AMD 7000 series is released (soon, according to rumors), you can count on your 6990's value to drop significantly.

6990s are ~$700 new. That's $2100 brand new for all three. You can't realistically expect them to only lose $50 to $100 each over the next two years.

Hardware depreciates fast. High-end gaming hardware depreciates faster.

You can't assume that it will maintain this pace.  Bitcoin muddles along for long periods, then has massive rallies when new articles are printed.

If I'm a prophet, sure.

But if I don't know if BTC price will rise or fall, and only know that a fall in BTC price will cause difficulty rise to slow down, so difficulty divided by price will not change much, and that at current difficulty/price buying a dedicated mining rig is insanely profitable... I choose the rig. (Plus it's satisfying and a positive externality).

I've been hearing about how mining was about to become unprofitable ever since I joined Bitcoin, but so far it didn't happen.

The thing is that bitcoins are unstable, the value could double today, or halve by tomorrow.
a hd 6990 used is a good $600 to $650 for the next two years.
i bought the whole setup for 3 grand
I can sell my three 6990s for around $2000 if bitcoins do fail me, or if i so please for the next two years. after two years it might drop to 1.5k to 1.8k for all three
If I had bought 3 grand worth of coins, the next day they may be worth 6grand, or the next day they may be worth 1.5 grand.
who knows what the bitcoin will be worth in two years. i can tell you that the videocard will still be worth more than $500

its riskier with the coins than physical hardware. I can rely on the hardware to retain it's worth, because they have other uses than for mining.

bitcoins on the other hand so far have limited use.

If bitcoins could be used to purchase items like ipods or phones or laptops, then everything changes.
I really do hope that would happen soon. although i sadly doubt it.

im not really a bettin kinda guy and i seem to suck at trading but thats just me.

Thats actually pretty good. i hadn't thought of it that way.

So if i kept one bitcoin, at $1, and assumed a doubling rate of 10 days (a "few days" to be sure), then in about a year it should double 36 times. the coin would be worth 68 billion dollars.

and i didn't even have to fill my room with noise, heat, waste electricity and pollute the environment.

if we stopped mining completely. then the current 6 million coins alone would eventually be worth around ~4x10^17 dollars. We could buy out the united states with kinda money.... ofcourse there will be more coins generated so the amount is even greater.

(btw i'm just kidding about buying a country).

I think we should devote our time to making the client divide out smaller units of the coins easily. 68 billion dollars per coin already taxes the 8 decimal limit on transactions.

i'll stop mining when i get home. i have enough coins already to ensure i'll have trillions of dollars worth of value in a year or two. i can probably mine a lot more but i'm content with a few trillion dollars.  And my rig is very inefficient is puts out a lot of heat.

You guys can keep mining if you want.

And my point is made again. In about the time it would take someone to source a GPU, buy it, hook it up, and wrestle with drivers, the valuation of a bitcoin has nearly doubled. By just buying the coins you could have made a 100% profit in a few days instead of a year.

I don't think anyone is saying that in such case it isn't profitable, but price is based on speculation and throwing out several thousand dollars based on that is a bit absurd.

The current ask price on mtgox is up to $2.50.
if my math is correct (and it usually isn't) thats a 25% increase in the last hour and a much larger % over the day.

The incentive to enter the market just skyrocketed. Anyone thinking of selling their old mining rigs?  

I totally agree with you on this one.

I'd agree for the most part, but it's troublesome to see people buying expensive hardware based on current difficulty ratings and expecting to pay it off in a few months. Meanwhile, the next difficulty increase occurs in 2 days and is over 16%!

if that's the case, I will make a thread and publicly announce my stupidity. Fair enough?

Anyway, all this is a bit beside the point. I believe people are not stupid and will regularly check if mining is profitable for them, this should result in fairly brief moments of mining unprofitability.

Think of it as "investing" or "managing your economy" rather than gambling.

I think the difficulty level will be well above 3 times today's level by 27 April 2012.

neither do i. 

No. This is still gambling, and I don't gamble

Trippling current hashrate would barely cover electricity cost where I live (and electricity is quite cheap over here), and at this point I think growth will stop. This is my reasoning.

edit:
I still think mining should be encouraged, as it makes bitcoin more secure.

Really?  In a whole year?  I have a proposal for you...

I've got 10BTC says the network is at or above triple today's hashrate (712.08 Gh/s) at Bitcoin Watch, by April 27, 2012.

Bet?


I agree, buying expensive hardware specifically for bitcoin mining is a bit ridiculous.
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Perhaps.  It just depends on what you believe the exchange rate will be in the future.

Exactly the same reasoning as you, but I just can't see total power tripling in the next year. I hope I'm wrong though.


I agree, buying expensive hardware specifically for bitcoin mining is a bit ridiculous.

lool..watch out guys...Vladimir's mining cluster will be the birthplace of Skynet...all your bitcoinz are belong to him!?