Topic: Been in bitcoin a few years, never looked at mining. (Read 3583 times)

J-Dubbs,

I did not say "don't mine".  I pointed out that for some time, and I believe now, one would do better to farm fiat directly into BTC.  As far as expecting a $1300 machine to mine 100BTC, if BFL had delivered in any reasonable semblance of their repeated promises this may well have been possible.  At the time they seemed to be the most highly capitalized option.  Who was to know how deeply over their heads they really were?

I would add two points to your reasons to mine;

To secure and decentralize the network.  The more hash in disparate private hands the more resilient we are.

To acquire BTC with minimal paper trail.  Hardware manufacturers, unlike exchanges, are to date under the radar of the regulator and the tax man.  If one had...ahem...unreportable fiat, the incentive to mine, even at a lower return than might be available on the exchanges, would be greater.

Most miners are tech guys first with no background in studying economics. Unfortunately, this means you'll need to do much of your own research in deciding whether you want to mine.

The term "ROI" is misused all. the. time.

When the value of the BTC mined exceeds the cost of equipment is the point you break even, doesn't matter if it's 1btc at $900 or 9 at $100; covering costs happens when you realize the gain or loss through trade on the exchange, or if BTC ever stabilizes you could handle all your accounting in that format. ROI happens the minute you plug it in and should be expressed as a fraction or percent value. (ROI = return/cost)

Anyone expecting 100 BTC from a machine costing $1,300 is being blind to how efficient the market is, not to mention unreasonable in expectations. Yes the delay on equipment is an opportunity cost, but the upwards trend in BTC is proof that the market is efficient in pricing. The other option would be flat pricing and no market for exchange, in that case we'd have nothing to discuss here. At all.

The cost of equipment does not drive the price of BTC up directly. The rising difficulty and need to upgrade technology are what should be known as "increasing inputs". An input is what you need to produce an output. When inputs are increasing it shifts the supply curve left, meaning it is more scarce, in this case BTC is relatively more scarce due to the rising inputs. Supply curve decreases and shifts left, this is called a shortage. Buyers are willing to bid the price up to compete in acquisition for the scarce supply available. Price meets demand at where the market determines. Nobody should care at all about how many BTC they can mine, the only thing that matters is the value of the BTC mined against other relative measures available for trade, most often cash is the measure because it puts things in the most relative terms available.

It gets a bit old hearing people say "don't mine" without much reasoning provided. Buying versus mining is a decision YOU need to make based on the information available, not some guy on a forum and what fit for him. There are many different ways to mine, different configurations come with their own unique costs. If you can source ASICs at competitive prices, and finding them might take lots of searching, but you'll be in a much different boat than someone buying on EBay for double expense. The other part is being clever with your setup and configuration, forecasting and planning ahead, etc...

I prefer mining because I enjoy learning about the equipment and it's a fun activity. Looking at a chart gets boring, been doing that with equities for almost 15 years. Being able to mine and be a part of it on a producer level is rewarding in a way. Also, by mining I'm not stuck with the psychological baggage of cost basis tied to my position. I'm mining because it's uniquely different than trading to build a position, and I honestly find it much more interesting, really all depends on what you are looking for.

But the messing is fun. Half the fun in mining (for me) is setting up the hardware, keeping it running, trying to overclock etc.
Mining with no hardware is just weird - I pay some BTC, hoping that the guy I paid to will later pay me more BTC.

Then again, I also run other stuff in my servers just for the fun of it (without any expectation of receiving money), so mining BTC with local hardware is great - I get to run more devices and this time I actually have a hope of at least not having to pay for the electricity (if I'm lucky I'll even get the money I paid for the device back and maybe some more).

Gives me my forex type itch some relief haha.

Yeah - I haven't looked back.  Gets a bit addictive as well 

It automates much of the messing about with mining, and yet still allows you to join in.

I'd say that mining is a bit lower risk than buying, but lower potential reward. Unlike 2012 July, now the difficulty could be predicted a bit. So, I ordered a couple of Technobit HEX16B miners at about 1BTC each because the calculators showed that they would generate more than 1BTC (each). Maybe the won't. Maybe they will generate 0.8BTC, then I will lose some money. OTOH, if BTC price drops, difficulty could drop (or increase less fast), meaning I will generate more BTC. Difficulty could even stop increasing that much altogether (after all, it is easy to go from 1PH/s to 2PH/s, harder from 2PH/s to 4PH/s harder still from 4PH/s to 8PH/s and much harder from 8PH/s to 16PH/s - at some point the ASIC technology will reach the CPU/GPU technology level and will not be developed as fast as it is now).

So far enjoying the CEX.IO platform a lot. Nice use of some of my btc holdings and the buy sell platform is working very well. Completely painless and a way to make some extra BTC off part of my BTC holdings.

never bother getting into it, mining is dead

Ok I found this in the FAQ of ghash:

16+ GH/s - 16 difficulty
32+ Gh/s - 32 difficulty
64+ GH/s - 64 difficulty
128+ GH/s - 128 difficulty
256+ GH/s - 256 difficulty
512+ GH/s - 512 difficulty
1 TH/s - 1024 difficulty



So I assume I should be changing that in the preferences depending on how many GH/s I own at any given time? I feel like such a newbie haha even if I have owned bitcoins for a few years.

I assume there's a default stratum difficulty already in place when buying even if ghash says Default Stratum Difficulty 0 in preferences?

Put in a couple bitcoin to try out the waters. I like the platform so far.

I have gone for CEX.io as a compromise between mining and trading.  Its where I'm making my BTC earn morefor me.

I think thats my biggest issue is paying some company lots of money and then waiting for who knows how long till I could even start?

while this is certainly true, it is also true that almost all mining equipment deployed since the advent of the ASIC era will never ROI in BTC terms


say, for example, that you had the foresight to preorder a BFL single in July or August of 2012, they cost $1300 at the time...BTC were $13, when you finally got your unit, a year or more later, sure, you could mine back your $1300, but no way in hell it will ever mine 100BTC

I have been mining, on a small scale, since the GPU days, and I would like to stay in the game.  At the moment the HashFast Sierra batch 4 1.2TH looks like the best bet, but it is $6300, and if I'm going to invest $6300 in bitcoin right now...I'm going to buy fucking bitcoin with it, not a spot on a waiting list where I can watch the delay announcements on the forum as the difficulty skyrockets.

just my opinion

If the price per coin keeps rising, I'll probably start tapering off just flat out buying as I have been where a $15k investment into mining might yield better overall results if things keep going the way they are with prices.

I'm not primarily a miner, I write mining software and it's in my interest to have more miners so I have no vested interest in having less people mining and keep trying to warn people not to waste their money.

important: miners will never advise newbies to start mining, instead miners will advise you to buy the bitcoins they have mined

I am definitely ok with 1-4, With ABC, B is what seems to be the worry for me just reading around, horror stories, etc.

Mining is best suited for people that
1) Want to support the network
2) Take a long term position in believing in the fundamentals of bitcoin and the belief that the coin will maintain or grow its value.
3) People with knowledge of miner release cycle and how to position themselves in the best position while minimizing as much risk as possible.
4) People that can afford to have liquidity tied up for months before getting their product.


Most new people should not look into mining until you understand
A) the fundamentals of Bitcoin
B) the huge risk period between ordering and receiving a miner
C) the technical/fundamental analytical capability to forecast months ahead to make the best decision possible at the best time possible.

most people that just buy into Bitcoins still cannot do C and lose their minds the moment they see any volatility.

the "mining for profit era is dead" statement is not true at all. Hell i even have a BFL device and with the price rise i paid for my device weeks ago. People with KNC Jupiters right now are probably laughing all the way to the wallet. You have to balance risk with reward potential and its true that most miners will probably not make you as much than if you just bought the coins.

I always wondered why so many newbies wanted to get into mining?
Seriously, people didn't buy shovels when gold skyrocketed the last years, they didn't buy drilling equipment when oil did.

The short answer is and always will be NO.
Don't invest into something you don't understand.
If you can't answer the question whether or not mining is worthwhile yourself, you should just stay out of that business.