Best strategy for a newbie with about $10k to invest

oshiba

newbie

Activity: 2

Merit: 0

Quote from: MegaKill on December 06, 2013, 05:44:25 AM

i think BTC mining is gonna be very very hard, like some said. unless you have this Cheesy

http://www.theverge.com/2013/12/2/5165428/bitcoin-mine-in-hong-kong-uses-jelly-to-keep-cool

That`s a beast!! I don`t think that someone with just a small blade and high cost for power will be able to brace even.

willpower101

newbie

Activity: 14

Merit: 0

Quote from: Iwilechu on December 06, 2013, 11:01:56 PM

My personal approach, if I had $10000 land in my lap, would be one of two options:

2. Put your BTC into multiple exchange accounts, open a CryptoTrader Pro account, and let it manage the day-to-day trading for you.

Thansk I'm going to look into CT Pro now.

Quote from: daisotope on December 07, 2013, 12:36:43 AM

The problem with getting into mining is that your returns over time are the inverse of this function:
https://blockchain.info/charts/hash-rate

Buying and holding BTC has proven to be easier and more lucrative for me.

Glad to see someone who knows their stats 101.

I can't remember what machine I snagged this graph from (genisis block) because I'm working on like 10 charts at once right now, but this is exactly what he's talking about above.

Although I have to say that buying and holding 10btc for 10k doesn't sound like a well diversified risk. Maybe when they were less than $400, and even then it was scary.

https://www.evernote.com/shard/s26/sh/d9f823c4-4886-44b3-9c9b-15bd02218c98/d0da39db65fbab32cf85fe1f36e612fa/deep/0/Bitcoin-Calculations.png Click for large view - Uploaded with Skitch

Quote from: odolvlobo on December 06, 2013, 03:21:10 AM

Please don't invest in mining without first learning how to compute your expected return. Too many newbies blindly invest and end up losing money.

For example, on cex.io, a popular cloud mining site, 1 GH/s costs 0.074 BTC, but 1 GH/s will never mine more than 0.05 BTC. For every GH/s you buy on that site at that price, you will lose up to 0.024 BTC.

This is true. But odolvlobo fails to include the future-value of the btc and the future-value of the GHS in his calcs. That's the only thing that makes cex.io profitable, if only mildly - hedging on the increase. Which means, in THIS CLOUD situation, I would recommend buying and holding over mining. (Something I RARELY recommend)

daisotope

newbie

Activity: 4

Merit: 0

The problem with getting into mining is that your returns over time are the inverse of this function:
https://blockchain.info/charts/hash-rate

Buying and holding BTC has proven to be easier and more lucrative for me.

Iwilechu

newbie

Activity: 4

Merit: 0

My personal approach, if I had $10000 land in my lap, would be one of two options:

1. Wait until a more reputable ASIC vendor (read: KnCMiner, but up for debate) begins accepting preorders for their next generation of ASIC mining hardware, verify the stated hashrate will net you a positive ROI, and place your order as fast as possible. Usually, the farther from the front of the line you are, the less you'll profit.

2. Put your BTC into multiple exchange accounts, open a CryptoTrader Pro account, and let it manage the day-to-day trading for you.

maxxoccupancy

member

Activity: 70

Merit: 10

Also, for the buy and hold strategy, it's usually best to start buying (in a bear market) only after it's gone down for a while. In the stock market, many fund managers and brokers leave some money in treasuries or even gold/silver until the market appears to have bottomed out into a valley. Unfortunately, there's nothing to fill that position in the exchanges, right now; although some of us are working on that.

odolvlobo

legendary

Activity: 4438

Merit: 3387

Quote from: chandrew on December 06, 2013, 02:24:08 PM

Quote from: odolvlobo on December 06, 2013, 03:21:10 AM

Please don't invest in mining without first learning how to compute your expected return. Too many newbies blindly invest and end up losing money.

For example, on cex.io, a popular cloud mining site, 1 GH/s costs 0.074 BTC, but 1 GH/s will never mine more than 0.05 BTC. For every GH/s you buy on that site at that price, you will lose up to 0.024 BTC.

how do you calculate never mining more than .05 BTC? so investing in CEX results in losing up to .024 BTC? so invest, or no? it looks profitable atm!

When the difficulty rises, the revenue falls. The difficulty will be going up in a couple days so the return you are getting now will drop soon, and then again in 12 or so days, and so on...

To calculate the maximum, you estimate the future difficulty and add up the payments. With the difficulty going up so quickly you don't really have to predict very far into the future before the revenue drops close to zero.

chandrew

newbie

Activity: 56

Merit: 0

Quote from: odolvlobo on December 06, 2013, 03:21:10 AM

Please don't invest in mining without first learning how to compute your expected return. Too many newbies blindly invest and end up losing money.

For example, on cex.io, a popular cloud mining site, 1 GH/s costs 0.074 BTC, but 1 GH/s will never mine more than 0.05 BTC. For every GH/s you buy on that site at that price, you will lose up to 0.024 BTC.

how do you calculate never mining more than .05 BTC? so investing in CEX results in losing up to .024 BTC? so invest, or no? it looks profitable atm!

chandrew

newbie

Activity: 56

Merit: 0

Quote from: bitintheghetto on December 06, 2013, 01:30:16 PM

Quote from: surya39 on December 06, 2013, 04:59:59 AM

Best strategy would be to invest in Cloud Mining, as you have the option to opt out anytime you feel like.

I took a look at the cex.io site and the numbers seemed very bad.
Maybe I read them wrong?
Can you help here? It says GH/BTC 0.0747 what does this mean? 0.0747 GH/s for one bitcoin or 0.0747 bit coins for 1 GH/s?

If it is the former then $10k would get you 74 MH/s which is just pathetic. You would end up just losing money.

The latter on the other hand equates to about 13GH/s per bitcoin which makes much more sense. Hmmm. I might actually consider this. What I don't understand is how the maintenance fee works. I expect hat after about three to four months you would want to pull out your money and mined coins as difficulty skyrockets but I'm not entirely sure of the math related to the depreciation wrt maintenance and pool fees. The calculator just says 3% for each. IS that monthly/ daily does it compound?

I think i'll just email those guys.

And lastly, why don't they just mine the damn thing themselves? I can't imagine they have idle hardware sitting there waiting for someone to pay for CPU/ASIC time.

it means you pay .0747 BTC for 1 GH/s

i have tested the waters with .1 BTC into CEX, and i am at .108, with the price of GH/s on the rise!

odolvlobo

legendary

Activity: 4438

Merit: 3387

Quote from: bitintheghetto on December 06, 2013, 01:30:16 PM

Quote from: surya39 on December 06, 2013, 04:59:59 AM

Best strategy would be to invest in Cloud Mining, as you have the option to opt out anytime you feel like.

I took a look at the cex.io site and the numbers seemed very bad.
Maybe I read them wrong?
Can you help here? It says GH/BTC 0.0747 what does this mean? 0.0747 GH/s for one bitcoin or 0.0747 bit coins for 1 GH/s?

In the forex world, X/Y means the price of X in Y. It is an unfortunate standard created by people that obviously don't know math (which is ironic). So, GHS/BTC means price of GH/s in BTC, and the cost of 1 GH/s is 0.0747 BTC.

katoshi

member

Activity: 70

Merit: 10

to the core!!!

you will probably waste most of the money. inform yourself first, get the lay of the land, mine a little with your current setup. difficulty is rising fast right now, your hardware wil be obsolete before you refinanced it, if you don't know what you're doing.

in the meantime, buy some bitcoins when they are low.

OC19850520

full member

Activity: 189

Merit: 100

Quote from: bitintheghetto on December 06, 2013, 01:30:16 PM

The calculator just says 3% for each. IS that monthly/ daily does it compound?

It is daily. You may look at difficulty graph, it is increasing by about +25% every 11 days. Like here:
http://bitcoin.sipa.be/

bitintheghetto

newbie

Activity: 11

Merit: 0

Quote from: surya39 on December 06, 2013, 04:59:59 AM

Best strategy would be to invest in Cloud Mining, as you have the option to opt out anytime you feel like.

I took a look at the cex.io site and the numbers seemed very bad.
Maybe I read them wrong?
Can you help here? It says GH/BTC 0.0747 what does this mean? 0.0747 GH/s for one bitcoin or 0.0747 bit coins for 1 GH/s?

If it is the former then $10k would get you 74 MH/s which is just pathetic. You would end up just losing money.

The latter on the other hand equates to about 13GH/s per bitcoin which makes much more sense. Hmmm. I might actually consider this. What I don't understand is how the maintenance fee works. I expect hat after about three to four months you would want to pull out your money and mined coins as difficulty skyrockets but I'm not entirely sure of the math related to the depreciation wrt maintenance and pool fees. The calculator just says 3% for each. IS that monthly/ daily does it compound?

I think i'll just email those guys.

And lastly, why don't they just mine the damn thing themselves? I can't imagine they have idle hardware sitting there waiting for someone to pay for CPU/ASIC time.

bitintheghetto

newbie

Activity: 11

Merit: 0

Quote from: Sparky_eMunie on December 06, 2013, 05:54:14 AM

With most asics your return will be minimal. Invest in Bitcoin, or some promising altcoins like Datacoin, Securecoin or Protoshares.

I was thinking this too. Looking at a long list of ASICS that can be reordered, they all seem to be popping up at points where the increased difficulty in the bitcoin algo would make them next to unprofitable.

I'm thinking I would just build a GPU cluster and mine some SCRYPT based coins. They are apparently ASIC resistant, this should make their difficulty curve less disruptive. I really want to do some real mining as opposed to downright coin purchase. My ideal scenario would be coming up with a solution that scales with corresponding difficulty increase in the altcoin algo while remaining profitable.

Sparky_eMunie

full member

Activity: 147

Merit: 100

With most asics your return will be minimal. Invest in Bitcoin, or some promising altcoins like Datacoin, Securecoin or Protoshares.

fartbags

legendary

Activity: 1190

Merit: 1004

Definitely invest in mining scrypt only.

ASICS have shown how weak the sha256 algorithm is. sha256 is from 2001 which is ancient in computer years.

Swoos

newbie

Activity: 4

Merit: 0

buy 10 bitcoin and keep them for half years

MegaKill

member

Activity: 93

Merit: 10

i think BTC mining is gonna be very very hard, like some said. unless you have this Cheesy

http://www.theverge.com/2013/12/2/5165428/bitcoin-mine-in-hong-kong-uses-jelly-to-keep-cool

Bobbydiggital

newbie

Activity: 28

Merit: 0

why not just buy BTC directly? I mean its becomming very difficult to mine BTC, with a 10k investment you would get close to 10 BTC right now, how long would it takes with a 10k set up to mine 10 BTC? Id like answers from BTC pros cause im thinking if he buys them directly he might get a better ROI even more so if doing a bit of trading am i wrong or missing something here? Huh

surya39

newbie

Activity: 16

Merit: 0

Best strategy would be to invest in Cloud Mining, as you have the option to opt out anytime you feel like.

vrm86

hero member

Activity: 676

Merit: 500

Quote from: Itun on December 06, 2013, 04:18:06 AM

Quote from: vrm86 on December 06, 2013, 04:10:47 AM

IMHO beware of all ASIC preorders with shipping by 3-4 months.
Today it looks like great deal to buy xxx GH/s machine, but in few months it's gonna be unprofitable.

Exactly.

Maybe you can preorder some scrypt ASICs.

If you can get a hold of a few really early in the game by preordering and waiting, you can probably make tons.

Yes, if you be the really first one. If hashrate rises dramatically, the prices of coins gonna fall same way.
Bitcoin was the only one when ASIC started, now cryptocurrencies market is crowded by many types and clones of BTC/LTC.
Some of them will remain scryptASIC-proof I think.

Quote

Is there an ASIC provider that claims to produce hardware for SCRYPT crypto?

Something like this: http://scryptasic.org/ ,but it doesn't look much legit for me, but maybe I'm wrong.

Topic: Best strategy for a newbie with about $10k to invest (Read 1468 times)