PUBLIC SERVICE ANNOUNCEMENT FOR THOSE NEW TO BITCOIN OR BITCOIN MININGBitcoin is going to blow up in 2014, we all know that. So what better way to get involved than start mining it! Right?
Wrong, dead-on-arrival, dead as a doornail, reaper with scythe cackling over your rotting corpse wrong. If you intent to profit, that is.
If you are OK to mine at a loss, because you enjoy the technology, or because you want to do your part to secure the network, good for you.
Every single day I see a new thread, "I have XYZ amount of BTC/USD and I want to get into mining!" The unsurprising part of this is that these posts are almost always from new BitcoinTalk members who have little to no technical understanding of mining, no experience mining, no understanding of how to properly calculate the profitability of mining hardware, but plenty of enthusiasm and money for what they perceive as a cash grab or get rich quick scheme. The surprising part of this is that many of these people are actually intelligent, well educated individuals. However, the desire to earn a quick and easy buck has a blinding effect on them; their most powerful tool - the logical part of their brain - stops functioning because another, reptillian part of their brain is screaming "MONEY. LOTS AND LOTS OF MONEY."
The press certainly does their part to propagate this - every day there is a new story about people making tons of money from mining, or some new manufacturer or new hardware which is certain to bring untold riches to those who purchase it.
Stories like this:
http://dealbook.nytimes.com/2013/12/23/morning-agenda-the-bitcoin-mines-of-iceland/?_r=0http://www.forbes.com/sites/kashmirhill/2014/01/03/the-craziest-bitcoin-business-making-money-minting-machines/http://www.wired.com/wiredenterprise/2013/05/butterfly_live/My opinion, which is informed by a fair bit of research, is that for-profit-mining for the hobbyist, enthusiast, or semi-pro is effectively over as of 2014. There is still profit to be had in the mining game, but its going to go mostly to large professional mining conglomerates, pool operators, and hardware manufacturers. This is not news per se or anything like a revelation, and its no secret among people who have been around here for a while. And although there are other threads out there which warn new users about getting into the game, apparently they arent being read and in my opinion having one more cant hurt - all Im trying to do is save people money and heartache. My comments also apply to alt-coin mining, although there is a bit of life left to be squeezed out there, the writing is on the wall with people moving 100mh/s+ rigs into datacenters. Economies of scale, tiny margins, etc. Big money is now deeply into mining, it wont ever go away, and you wont be able to compete with it, unless you also go fulltime pro and invest a very large amount of capital.
But there is another, more important point I want to make, and thats why I created this thread rather than bump an existing one.
There is HUGE profit to be made in the Bitcoin space. There is an entirely new digital economy full of goods and services that is being created as we speak, and if you were to secure just a microscopic fraction of a percentage of that revenue, you would realize your financial dream. Furthermore, you as an intelligent, well educated person with a solid work ethic are uniquely positioned to capitalize on this new space. All of your expertise and experience in whatever field it is that you specialize in is highly valuable, and if you apply this to the Bitcoin space, you have an opportunity of a lifetime to get in on the ground floor of a revolution. Yes, starting a new business or expanding an existing one into the Bitcoin space is difficult and there is risk involved of course. But just recognize that the upside of a successful business in the Bitcoin space is potentially much, much higher than that of a traditional one.
FULL DISCLOSURE: I have been into Bitcoin mining for almost 1 year and have sometimes made a profit -
in the past. I have a pre-order for an ASIC due to ship this year, but I wont be surprised at all if I dont turn a profit on it. Furthermore, the money I spent on a preorder was profits from previous ventures, not fresh capital. Also, had I invested 100% of my investment money into buying Bitcoin from Day1 and never got into mining at all, I would have more total Bitcoins than I currently do. Furthermore, the money I spent on a 2014 preorder is fairly trivial to me and losing 100% of the investment would not shock me or put me in a bad financial situation. Finally, Im one of those people who is OK with mining-at-a-loss, because Im interested in the technology and helping to do my part to secure the network so that less overall hashpower is concentrated in the hands of a few companies and pools.
