If u buy miner instead of BTC then your speculation is riskier AND profit is LOWER
Thats why there is no point in buying miner that will not mine more BTC then it costs
Example:
1BTC=300USD
1.im buying s7 for 5BTC = 5BTC or 1500 usd spend
2. im buying 5BTC
few months later i got like 3BTC back from s7 and 1BTC=1000USD
1. i have 3BTC or 3000USD - electricity = wow profit 200% in USD hohoho great BUT:
2. i have 5BTC or 5000USD = 2000USD more than example 1.. profit more than 300%
If 1BTC gonna cost 200USD then:
1. i have 3BTC = 600USD -- you lost 2BTC and 900USD
2. u have 5BTC = 1000 USD - you lost 500USD so u have 400USD more anyway
Its Always WIN for buying BTC unless ofc u think your miner gonna mine more BTC then it costs.
There is one exception becouse you can sell your miner but if ppl would think then noone would want to buy it from you. And ofc your miner can burn or something. So more RISK and LESS profit.
P.S
And i want to add one more thing that if we all just buy BTC then we will help BTC price will go highter. If we are buying gear then yes we are buying BTC but then producent will sell this BTC soon for USD so we r not really helping BTC price to rise
That is a very great point in re: to your model. ROI for mining has gotten very long, however you did not include re-sale price into your equation. SO, let's run the same comparison for an S5 purchased last December, and put online on January 1st until today, for the cost of $500USD. This isn't speculation, but fact:
1) Spend $500USD (around
BTC1.5 at $330 exchange) For an S5. Difficulty was 40,600,000,000 and average difficulty increase was 2.2% over the 24 periods. Assuming electicity cost of $0.07/kWh (I'm using an average exchange rate of $260 over that course of time for the sake of electricity costs)
Total Net Income -
BTC2.3
Current re-sale value of S5 (conservatively) $320 or
BTC1
Total Net Return on your
BTC1.5 investment in Bitcoin -
BTC1.8 or 120%
Total Net Return on your $500 investment in $USD - $575 or 115%
2) Spend $500USD on BTC, and get
BTC1.5 at $330 exchange
EVEN if you were to have cashed in at the highest exchange during that 11 month period of $502, you would have
Net Return on your
BTC1.5 investment in Bitcoin - 0% (since your Bitcoin didn't change in value)
Net return on your $500 investment in $USD - 51.5%
Now, let me do my speculation on the S7 purchase using your figures, but including a realistic re-sale value of the S7:
1. I'm buying s7 for 5BTC = 5BTC or 1500 usd spent
2. I'm buying 5BTC
few months later i got like 3BTC back from s7 and 1BTC=1000USD
1. i have 3BTC or 3000USD - electricity
of mining revenue = wow
profit 200% in USD hohoho great Edit: Antminer S7 has depreciated by 20%, and is now worth BTC4 (since the price of used miners is DIRECTLY tied to BTC and NOT $USD, as has been obvious with the used price of S5's during the recent rally), for a total of BTC7 or 7000USD, a profit of 466%
2. i have 5BTC or 5000USD =
2000USD more than example 1.. profit more than 300%If 1BTC gonna cost 200USD then:
1. i have 3BTC = 600USD -- you lost 2BTC and 900USD,
Edit: and the Antminer S7, which say is still worth BTC2, using a 60% depreciation, therefore you still have 5BTC and the same USD as example below2. u have 5BTC = 1000 USD - you lost 500USD so u have 400USD more anyway