are we being stupid? - page 2. | Bitcointalksearch.org

JJG

member

Activity: 70

Merit: 20

Quote from: Sjalq on May 31, 2011, 02:25:23 PM

I don't have the exact figures but given the increases in difficulty and the decreases in bitcoins mined, even with the increasing price, isn't it better for us to just buy and hold than to build mining machines?

We're laying out about $2600 for the rig, its pretty cool imho and there are other benefits, but I keep thinking there might be a smarter way. Among the other benefits are that I don't have to go through the capital control / tax issues of my country if I mine.

What have been your experiences of this if you are a long term miner? (buy vs mine (?) )

Put together a simple model with increasing difficulty, or use SgtSpike's pre-built spreadsheet. How long until you plan to break even?

Rising difficulty is really, really going to diminish your profits in short order. The only way around this is if the exchange rate goes up. Once you're banking on the exchange rate going up significantly, it might not make as much sense to invest in mining hardware rather than BTC.

For the record, I don't expect the exchange rate to keep going up.

fnord123

newbie

Activity: 47

Merit: 0

Quote from: finnthecelt on May 31, 2011, 02:50:49 PM

Freakin-a man. Get to mining. If it doesn't work you have some gear and probably had fun and learned a lot.

I will buy the "fun" angle, but the learning part seems like a stretch. What do people learn from mining?

How to configure poclbm? Wow, they learned to install a simple program and run it.
How to install latest ATI drivers? Woohoo!
How to stick PCIe cards in a box and connect a power supply? Most computer-inclined kids learn to do this before they are eligible to drive.
How to look at a list of hardware, choose what to buy, and whip out the credit card and order it? Sorry, being a consumer isn't a unique skill.

Other than the few folks here who actually wrote some OpenCL C, verilog, or similar such work, I don't think there is much learning that comes from mining.

SgtSpike

legendary

Activity: 1400

Merit: 1005

See my spreadsheet, Invest or Mine? (link in sig). That'll tell you whether it's a better choice to mine or buy, once you input all of the information properly.

xenon481

sr. member

Activity: 406

Merit: 250

Yes.

Sukrim

legendary

Activity: 2618

Merit: 1007

Quote from: finnthecelt on May 31, 2011, 02:50:49 PM

The theory of "just buy coins" continues to crack me up. Where will they come from?

As long as difficulty is above 1, this means a new block is being generated ~every 10 minutes (for this you need far less than a singe GPU miner worldwide).
If there are more miners, the coins will not be generated faster but only in a more secure way, that's all. I doubt that ensuring the supply of new coins should be a reason for anyone to mine.

finnthecelt

full member

Activity: 140

Merit: 101

The theory of "just buy coins" continues to crack me up. Where will they come from? I'm sure there's a dedicated group of miners who would just love people to "just buy coins from them" as you don't mine and go to work for cash to give to them.

Freakin-a man. Get to mining. If it doesn't work you have some gear and probably had fun and learned a lot.

Braden

newbie

Activity: 42

Merit: 0

Mining is a lower risk investment than speculation because you retain value in the equipment. Because of this, investors in mining are naturally going to see a lower rate of nominal return because they are taking on less risk.

In standard investment theory return on investment is a compensation for risk that cannot be diversified away.

fnord123

newbie

Activity: 47

Merit: 0

Wow, $2600 for a rig? You do realize that just to break even, with no difficulty increases, it would take months? And that if difficulty keeps going up at half the rate it has, you will easily be at least $1000 and more likely $2000 in the hole?

Sukrim

legendary

Activity: 2618

Merit: 1007

Quote from: Sjalq on May 31, 2011, 02:25:23 PM

are we being stupid?

No, but hopefully aware that mining will return most probably less money than buying BTC directly, should the BTC <--> USD ratio go up further.

BUT:

Should the BTC <--> USD rate go down, you still have some value in hardware, you can use your hardware for something else and also it might be a free investment if you have your GPU in your PC anyways already.
Buying new mining hardware just for mining is however a, let call it "very optimistic" investment if you want to invest in BTC and could buy plain BTC instead too.

Atroxes

member

Activity: 119

Merit: 100

First off, I'm not a long-term miner.

There's a rather simple answer though... It's fun, interesting and a learning experience, to put together a big mining rig. The custom casing, airflow modding, fine-tuning GPU clocks and tweaking software.

I don't know if a $2600 mining rig will earn itself back for you. I also don't know if you'll make a profit on buying $2600 dollars worth of Bitcoin.

If only one could peak into the future Roll Eyes

Elios

newbie

Activity: 17

Merit: 0

long haul vs. short term
mining is a long term investment it may take 2-3 months to pay off the rig but once you do its mostly profit
if you by then you have to sell or hope it doesnt tank be for you do
with mining your rig just takes longer to pay off
as long as your making for then it cost to run the rig your in the black

Sjalq

sr. member

Activity: 280

Merit: 250

Hey guys,

I've requested the quote for the mining rig me and a friend are putting together and I'm real stoked.

I did however come across a post in the economy section that called us miners rubes for mining instead of just buying.

I don't have the exact figures but given the increases in difficulty and the decreases in bitcoins mined, even with the increasing price, isn't it better for us to just buy and hold than to build mining machines?

We're laying out about $2600 for the rig, its pretty cool imho and there are other benefits, but I keep thinking there might be a smarter way. Among the other benefits are that I don't have to go through the capital control / tax issues of my country if I mine.

What have been your experiences of this if you are a long term miner? (buy vs mine (?) )

Topic: are we being stupid? - page 2. (Read 4916 times)