Topic: If you're thinking buying mining hardware, read this first - page 12. (Read 92726 times)

And we've been over that flawed argument already, too.

tomcollins was kind enough to share his projections of mining profitability with exchange rate increases/decreases taken into account.

If you're betting on the exchange rate going up, then buying bitcoins will net you a profit without buying rapidly depreciating hardware and paying for expensive electricity.

And nobody can, because the profitability of mining depends most largely on the exchange rate going up at a certain rate, but that's the bit of the equation about which nobody can make reliable predictions.  At this point I continue to mine because I believe this is a worthwhile project to spend some of my electricity (and ultimately money) on.

You must realize the total network computing capacity is over 1000 Ghash/s right now. 10GHash/sec is less than the day-to-day variations in computing capacity.

There's a strong trend in this thread. People either:

• Look at the charts, run their own calculations/models, and determine that buying mining rigs is a very poor decision
• Ignore the math, charts, and rising difficulty, and instead rely on conspiracy theories to brush my arguments aside

Even the guy who said the trick was to buy cheap hardware admitted that it's no longer straightforward to buy hardware cheap enough to make it work.

Whatever you think my motives are (I assure you I am not trying to manipulate the market with a forum post  ) you can't argue with the math. So far no one has provided any sort of projections or calculations that show I'm wrong. Conspiracy theories don't count.

Paying anonymously and transfer money arround the world anonymously is not a niche, also hiding money in a small datastore and having several backups. It´s only the exchanges which have to work better, and there must be more shops. I´m optimistic about that.

It's not terribly complex logic. If he talks, say, 10 GHash off the network with his logic, difficulty would drop proportionately (albeit slightly). If, however, by his argument he prevents many people who are considering making a mining hardware investment (such as myself) from making said investment and instead using that money to buy Bitcoins, this is a win-win for him if he is mining. He increases scarcity and offsets potential network difficulty increases. It's not completely altruistic, ya know?

For the record, I plan on adding about a Ghash to the network myself over the next month or so. And yes, I realize this is a race to the bottom. So is the rat race that is fiat capitalism. I'll opt for this any day of the week...at least on here I'm not deluding myself.

There's nothing about the price of BTC in the last few weeks that suggests that a little downward pressure on the price wouldn't be a good thing. In the real world there are options markets and short sales to counterbalance rises in price; here in Bitcoin land those mechanisms don't exist on any real scale. Mining for sale will push back against the speculation in Bitcoin price, up until the lower price makes mining unprofitable.

You're missing the point.

I'm not talking about mining, I'm talking about running out to buy dedicated mining hardware with the belief that it will just pay for itself in a few months and then continue generating income for the owner indefinitely.

My registration and posts were prompted by some posts on this forum and a few others. In one example, someone spent $3000 on a dedicated mining rig and expected to pay $151/month in electricity, but hadn't bothered to take difficulty increases into account. By the time he received his hardware arrive, difficulty was up 19%. In ~9 more days, it jumps 30% (if not more). That means only a week or so after he started, his profits were already only 2/3 of what he predicted he'd make. If another 30% difficulty increase happens after the next one, his profits will be 1/2 of what he predicted.

A lot of the miners who come to this forum are starry-eyed with profits they roughly calculated, and eager to buy all the mining hardware they can. After all, it's free money, right? Well, realize that it's a race to the bottom and you're up against a rapidly increasing difficulty value that is explicitly designed to keep you from making easy money indefinitely. That's the system, and that's how it works.

Meanwhile, the influx of miners generally aren't intent on actually using bitcoin, they just want to do some mining and then immediately cash out to pay off their hardware. When scores of miners are desperately trying to sell their BTC to pay off their hardware investments, the value of BTC is going to fluctuate wildy, and the general direction won't be up.

Plenty of people have run the numbers. Curve fitting the rising difficulty is a trivial task, more advanced models don't tell better stories either. But none of this stops the "I want to believe" crowd who thinks that they're going to turn 6990s into indefinite cash streams.

I had a friend when I was younger who's father demanded he pay him $1 for every night he forgot to turn off the computer.

I wonder why JJG cares so much about others money. I've seen over 15 posts by JJG saying that mining will be not profitable. Of course in a long term there will be only miners who have electricity for free. But for now, difficulty adjusts to current price so mining is almost always profitable.

Hi, I´m new here. IMHO the difference between Esperanto and Bitcoins is the usefulness. You can´t buy stuff anonymously by Esperanto, or hide money, or speculate, etc. Bitcoins are usefull to some people, while Esperanto is pure idealism.
[/quote]
They have a lot in common.

Esperanto would be super useful if everyone spoke it.  Bitcoin would be super useful if everyone spoke it.  But you are right that Bitcoin would still be useful for niche applications where Esperanto isn't.

I think Bitcoin will be more of a niche, like Esperanto. A hundred years ago, many people thought that Esperanto might one day be used by most of the world's people. However, it ended up being of the order of a million fluent speakers.[/quote] Hi, I´m new here. IMHO the difference between Esperanto and Bitcoins is the usefulness. You can´t buy stuff anonymously by Esperanto, or hide money, or speculate, etc. Bitcoins are usefull to some people, while Esperanto is pure idealism.

It's not realistic. It took a couple days finding all the parts on ebay, newegg, and various computer forums. And it was also a lot of luck. And used 5870s for $165 shipped no longer seem to exist (and they were the key, the rest is just random junk).

I'd love to see the specs on what you are using for this.  If you can buy a rig for that cheap that is that powerful, mining is more profitable than buying by quite a bit.  I may have to rethink my mining position.  If you can spend $X and get .667X Mhash/s, you should come out ahead of buying in a year unless there is huge growth in BTC (BTC over $400 in 1 year).  Even then, you end up with $150,000 profit instead of $181,000 profit.

On the one hand, buying a mining rig means you can keep using it as long as you like and only pay electricity. (And, well, upgrades if you try to keep up with difficulty.)

On the other, the nice thing about buying compute time with some else is that uptime is their problem. I learned that one this week -- got a nice little rig from bitcoinrigs, works like a charm -- but for its net connection I installed a little $10 USB WiFi adapter. Guess which $10 component of the rig failed? Good guess. If I expect the rig to run 24/7/365.25, I can't balance its success on a component that just wasn't made to perform like a real commercial piece of equipment. A learning lesson.

So, is there any benefit to setting up your own system compared to putting a mining client on something like AWS or Google's App Engine and letting them do the "hard" work? Presuming it wasn't mining that caused the EC2 problem last week of course 

Same here. I do it cause I enjoy building systems and maintaining them. If I was a technophobe I'd just be buying BTC. Also for me electricity is fairly cheap ($0.06 CAD). 

Indeed, the hardware is a nice hedge. Especially if you are a deal seeker like me, and could make profit off reselling the hardware (today at least).

My newest rig cost me 692 USD and is currently mining at 1203 Mhash/sec, and it has a vacant pcie slot ready for another card which the PSU is quite capable of powering. At $.0886 per kWh (going down to $.0849 per kWh June 1st), it's a no-brainer.

But I only do this as a hobby anyway!

1. Where is .be? (Belgium?)
2. What date does 11'10 represent in Belgium? 11th of October or 10th of November?

Nevermind, I figure it's November 2010.

Yes mining is not profitable. Please stop using your GPUs to mine for bitcoins. Do not sell your GPUs, play games with them and just buy BTC on the market. Leave the mining to the insane.