Has mining (vs. simply buying) ever been profitable? - page 2.

Lorenzo

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Quote from: JaredStein on March 24, 2015, 09:25:21 PM

Like you said I think it was probably profitable when the price was around $50-$100. After that I do not think so xD

So mining was really only profitable in early 2013?

It looks like the first batch of Avalons were an anomaly. Back then, there were only really three companies rushing to produce ASICs - Avalon, ASICMiner, and Butterfly Labs. Since BFL kept delaying their customers' orders, the only real competition Avalon had was ASICMiner. Because Avalon was able to release their product first, their customers were able to reach ROI in just 9 days which is pretty insane:

Quote from: Bitcoin Magazine

Garzik will be able to earn an average of about $240 per day. Avalon’s remaining customers will also be able to enjoy highly lucrative rewards, although not quite as extreme; once all of Avalon’s 20 TH/s are added into the picture, each individual ASIC will earn about $120 per day (paying for itself in slightly under two weeks), although revenues will decrease further when Butterfly Labs’ customers get their hands on their own ASICs – an event which, given Butterfly Labs’ current shipping projections is likely to occur around the beginning of March.

Source: http://bitcoinmagazine.com/3231/working-avalon-asic-confirmed/

I'm curious to know if this was just an isolated case or if there were other similar examples. Did ASICMiner customers also make similar profits during this time?

JaredStein

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Quote from: Lorenzo on March 24, 2015, 08:34:33 PM

It's interesting to look back at older posts in the forum such as those from 2011 or 2012 where newbies ask about mining and even back then, people said that mining was unprofitable and that you'd be better off buying them from Mt. Gox instead:

Quote from: JJG on April 26, 2011, 12:20:42 PM

On the other hand, the exchange rate has been increasing lately. If you believe this will continue, then the numbers above don't look as bleak. However, it also means that you'd be better off purchasing BTC rather than mining hardware. If the exchange rate really does increase, your BTC will increase in value. Meanwhile, your hardware will only depreciate and produce less BTC over time...

...If you're counting on the increasing exchange rate to buoy your mining rig profitability, then you really should be investing directly in BTC, not buying mining hardware.

Quote from: Vladimir on August 22, 2012, 11:56:42 AM

after some analysis and some risk models done with help of professionals back in May 2012 I have suggested to some people I've been in touch with regarding potential ASIC mining project to forget about mining and simply buy BTC instead. After that our ASIC project was scrapped. It was back when BTC was valued at 5$.

From a thread on Reddit posted 29 Feb 2012:

Quote

...I'm not sure it would be worth it at all to mine coins. You're probably a lot better off just buying them.

From a thread on Reddit posted 22 Sep 2013:

Quote

The difficulty keeps skyrocketing faster than equipment can pay for itself. So you're going to lose money investing in mining equipment at this point in time. You'd be better off simply buying bitcoins.

Obviously I'm not talking about cases where Bitcoin mining paid off because of the increase in BTC price. Someone who spends $50 mining $30 worth of BTC which later becomes worth $300 would still have been better off buying the coins instead.

I know the first generation Avalon ASICs were extremely profitable and would reach ROI in just 9 days. Has there been any other examples of periods where Bitcoin mining would have been more profitable than simply buying and holding?

Like you said I think it was probably profitable when the price was around $50-$100. After that I do not think so xD

Lorenzo

sr. member

Activity: 406

Merit: 250

It's interesting to look back at older posts in the forum such as those from 2011 or 2012 where newbies ask about mining and even back then, people said that mining was unprofitable and that you'd be better off buying them from Mt. Gox instead:

Quote from: JJG on April 26, 2011, 12:20:42 PM

On the other hand, the exchange rate has been increasing lately. If you believe this will continue, then the numbers above don't look as bleak. However, it also means that you'd be better off purchasing BTC rather than mining hardware. If the exchange rate really does increase, your BTC will increase in value. Meanwhile, your hardware will only depreciate and produce less BTC over time...

...If you're counting on the increasing exchange rate to buoy your mining rig profitability, then you really should be investing directly in BTC, not buying mining hardware.

Quote from: Vladimir on August 22, 2012, 11:56:42 AM

after some analysis and some risk models done with help of professionals back in May 2012 I have suggested to some people I've been in touch with regarding potential ASIC mining project to forget about mining and simply buy BTC instead. After that our ASIC project was scrapped. It was back when BTC was valued at 5$.

From a thread on Reddit posted 29 Feb 2012:

Quote

...I'm not sure it would be worth it at all to mine coins. You're probably a lot better off just buying them.

From a thread on Reddit posted 22 Sep 2013:

Quote

The difficulty keeps skyrocketing faster than equipment can pay for itself. So you're going to lose money investing in mining equipment at this point in time. You'd be better off simply buying bitcoins.

Obviously I'm not talking about cases where Bitcoin mining paid off because of the increase in BTC price. Someone who spends $50 mining $30 worth of BTC which later becomes worth $300 would still have been better off buying the coins instead.

I know the first generation Avalon ASICs were extremely profitable and would reach ROI in just 9 days. Has there been any other examples of periods where Bitcoin mining would have been more profitable than simply buying and holding?

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