Topic: If you're thinking buying mining hardware, read this first - page 10. (Read 92715 times)

What's that they say? Hindsight is always 20/20?

Earlier in this thread you justified going to a lot of effort and spending a lot of money to mine at a loss out of nothing more than passion. Now you're questioning why I'm spending a few minutes per day posting in a forum?

Honestly, I'm stunned at the amount of misinformation that floats around these forums, and I cringe every time I see someone rushing out to pour money into dedicated mining rigs without understanding what rising difficulty means to their profits.

Read through the profitability posts here. The majority of them go something like this:

1) Look up video card hash rates on the wiki
2) Look up hardware costs on Newegg
3) Put projected hash rate numbers into generic income calculator with current difficulty and exchange rates
4) Multiply current projected income by 3 months, subtract upfront hardware costs
5) Become convinced that buying a mining rig is the best decision they can make

Of course, by the time the hardware shows up difficulty is up by 30% and quickly rising. These people aren't going to come anywhere near their projected profits. Meanwhile, it's stunning how hard people try to convince themselves and each other that they made the right decision.

It's like politics. If you can mathematically or logically prove that someone is wrong, chances are good that s/he will actually become more convinced of their correctness. Happens all the time, and it's happening here now. No amount of math or models or facts seems to convince people otherwise.

Brutal, guys.

Edit: My story...purchased 5830 for $109 for 4/12 mining start. Made 55 BTC so far.
My way: 55BTC x $3.235 = $177.93 - $109 (card) - $12 (estimated power cost at 4.8 cent/kW) = $56.93 profit
Your way: $109/$0.77 (MtGox price on 4/12) = 141.56 BTC x $3.235 = $456.95 - $109 = $347.95 profit

Touche, I guess. Mining for profit = not as efficient as playing the market.

Good thing I'm not mining for profit.

^^

I'm mining because I believe in Bitcoins. Also, because I hate the US Dollar and how we've all been robbed.


Or if you can get the hardware for dirt cheap (like the deal I just found...2 boxes, no hard drives, 1 missing PSU, both boards with a PCI-e x16 slot, processors, heat sinks, giant fans abound for $125), then there's no offset. Or very little. Hell, when I'm done, I can always get some monitors and have a LAN Party. That's the thing about mining hardware...you don't HAVE to use it just to mine with. Lots of other uses for it.

Well done.  

Not to mention, I didn't start this thread telling people to not buy rigs to start mining on April 1st. I started this thread to tell people not to buy rigs now that difficulty has gone up and is rapidly increasing.

I'm not sure how you went from "I built a rig 5 weeks ago when the difficulty was much lower and broke even by cashing out at the peak of the market" to "building a mining rig right now is still very profitable".

Electricity costs are such a minor part of the equation, though.  The price needs to get super low or the difficulty super high for the best rigs to be unprofitable just looking at electricity.  The cost is the rig itself, which is difficult to recoup the investment from (it takes a while to generate enough coins to make back that investment).  In the mean time, you could have bought Bitcoins up front, and had them all go up, rather than fight to get them against increasing difficulty.

But if you already have most of the hardware and it's sitting idle, buying a few cards can be a good idea.  It's a lot easier to recoup a $300 graphics card than a $3000 rig.

mtGox price on Apr 1- $.70
$1500/ .70 = 2142.86BTC

mtGox price now - $3.205

2142.86 * 3.205 = $6867

Total Profit: $5367.86

vs. Total Profit of $0 (your numbers).  Fantastic decision!

The difficulty is limited by the price because most people will only mine when it is profitable.  A large amount of hashing power was added to the network after the rise in price by people who turned there miners back on because it was profitable to mine again. (sorry that's a bit of a run on)  I'm rather surprised someone else didn't mention this when discussing the problem with the rising difficulty.  I agree that to many people are using bitcoin as a get rich quick scam (who really knows what other people are thinking) but I know many people are mining because they really believe in bitcoins.

Glad you can have correct elec rates, but the real question wasn't really a discussion of "is mining more profitable than electricity cost?" but more "is mining the most profitable?"

I think we can all assess that mining is profitable at least for the time being if you had elementary math skills. The real question is, would you look back and wish you had spent the money buying btc instead of mining hardware because it would have yielded you more profit. In my case I would have been better off today just buying outright looking both at profit and time spent.

If network grows as fast as it is today which is about 4% a day, the decision to buy hardware instead of btc outright is looking worse. I already rolled my dice and now I'm just looking for the right moment to sell my equipment. I already see some people listing ads and I worry that I will be selling my hardware with a huge competition if I hold out too long also. I won't be surprised if the difficulty starts going up by 30%+ as it seems it's picked up some steam after people jizzing forum guides all over the net. I would not be surprised things like a press release jump difficulties by chunks this year also. I hear there is a Forbes article and a Time magazine something coming up.. I never thought when I bought my hardware that the difficulty would rise this much this fast and I suspect it's only gonna pick up steam even faster now.

If I had to do it over again, I think I would have gone with just buying route. You might agree or disagree, but it would have saved me a lot of time and hassle. And yes I'm a bit bitter that I have all this hardware that I might have to try to unload because the difficulty is so high now, but it is what it is. 

shhhhhhh ... JJG won't like hearing that

Just my own story. I bought my first bitcoin mining rig and got it mining on April 1st. 2x5970's, system cost me $1500. In April it made just under 500 bitcoins for me. I sold them when bitcoins hit $3.80 shortly before coinpal went down. I made enough money in one month to pay for the machine and the electricity it used. So yes, building a mining rig right now is still very profitable.

OK, would you believe 11 kWh a day?

And just so you can check my math: it's drawing ~480 watts. So, about 70% of the power supply's rating. At $.14/kWh, that's $45 a month. If I can't get 15 BTC in a month, time to shut it down.

Ah, uh, oops. No, math was right, but data was bad (wrong device plugged into Kill-a-Watt). Updated data soon.

I think he did.

I suspect that you're not measuring something quite right.  ~700 Wh a day is about 30 Watts.  That's about what a laptop draws.  I have a hard time believing that you're really drawing only 30 Watts with a dual-GPU rig.

Electricity keeps coming up again and again, so let's talk electricity for a minute.

I'm looking at a 700W, dual 5870 rig here right now on a Kill-A-Watt, and it's drawing ~700 Wh a day.

Yes, a *day*. No, I'm not dropping a zero. The power supply may be capable of drawing 700W, and maybe it does on startup with all those fans winding up, but sitting here happily mining all day at ~680 kH/s, it's spending a total of... less than 1 kWh. I can run this thing for a *year* and pay $35 (at $.14/kWh, which is an overestimate of my yearly electricity cost).

Now, sure, you could overclock this thing and draw more power. And there's certainly a conversation to be had about hardware cost. But the electricity cost does not seem like a dealbreaker by at least a factor of ten.

Maybe that's his objective reality. Then it's not conspiracy at all...it's fact. Of course, that's only if you ask him...

I have taken the advice in this thread to heart. It has not, however, dissuaded me from buying hardware...especially after a visit to CL last night, where I saw that I can get most of the pieces I need (sans video cards and power supplies) for half the price I was thinking of. If anything, I would take the message in this thread as "Watch your ass when buying hardware that you can't turn over when you're done with it."

Also, defending against the >50% attack would be the most altruistic reason I can think of for running a farm. That's not the only reason I want to help, but it is definitely a consideration.

Again, I seriously do not know why you would spend this much effort on this particular topic.

Don't forget that those same moves in the value of bitcoin will also swing the present value of your mining rig.

Buying a mining rig is not, necessarily, less risky. Hardware depreciation and electricity costs are very real.