If you're thinking buying mining hardware, read this first - page 7.

JJG

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Quote from: stillfire on May 07, 2011, 01:52:24 AM

JJG, thanks for providing this analysis. Splendid work. I was just wondering today if there was any value in doing any hardware investment given the astronomical hash rate increases. You saved me the effort of running the numbers. Much appreciated.

Also very pleased to see you and tomcollins successfully defend logical reasoning in this thread. One doesn't see that work out very often on the internet. Wink

Thanks for the kind words. I'd still suggest you build your own simple models and check my reasoning if you're interested in the economics of it. The numbers are interesting, to say the least. Plus, the more eyes and models we have on a problem the better we can understand it.

On another note, it looks like we're due for a stunning 40% difficulty increase in 2.5 days! If anyone did order hardware for mining, I hope it's not still in transit over the weekend.

stillfire

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JJG, thanks for providing this analysis. Splendid work. I was just wondering today if there was any value in doing any hardware investment given the astronomical hash rate increases. You saved me the effort of running the numbers. Much appreciated.

Also very pleased to see you and tomcollins successfully defend logical reasoning in this thread. One doesn't see that work out very often on the internet. Wink

allinvain

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Quote from: slurch on May 05, 2011, 05:09:52 PM

Quote from: Sukrim on May 05, 2011, 05:06:01 PM

Quote from: njloof on May 05, 2011, 05:01:37 PM

I think the comparison is false regardless. Currency speculation has as little to do with mining as buying pork bellies on the commodity exchange has to do with farming hogs.

This thread is about if it still pays off to buy a new farm + some land and start to breed pigs, if the food will be 2% more expensive each day. Wink

Depends. If I can either send the pigs to slaughter when I'm done or put tutus on them and make them join the circus...well, you get it.

I'm the sort that would probably keep them all as pets and name them.

This little piggy went to the market..this other little piggy wasted his time in bars and got wasted all day..and this other little piggy built himself a bunch of rigs and got rich mining bitcoins... Tongue

allinvain

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Quote from: slurch on May 05, 2011, 03:30:35 PM

I'm not a betting individual...I get queasy buying scratch tickets. I sincerely hope you are wrong, though. Sad

They did not have the same ethos that a lot of the people here do.

Not only that but a LOT of them were woefully misinformed and they did not even show the willingness to educate themselves a bit before they open their mouth. Also many of them exhibited that idiotic "if it's new it must be a scam or something must be wrong.." attitude.

slurch

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Quote from: Sukrim on May 05, 2011, 05:06:01 PM

Quote from: njloof on May 05, 2011, 05:01:37 PM

I think the comparison is false regardless. Currency speculation has as little to do with mining as buying pork bellies on the commodity exchange has to do with farming hogs.

This thread is about if it still pays off to buy a new farm + some land and start to breed pigs, if the food will be 2% more expensive each day. Wink

Depends. If I can either send the pigs to slaughter when I'm done or put tutus on them and make them join the circus...well, you get it.

I'm the sort that would probably keep them all as pets and name them.

Sukrim

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Activity: 2618

Merit: 1007

Quote from: njloof on May 05, 2011, 05:01:37 PM

I think the comparison is false regardless. Currency speculation has as little to do with mining as buying pork bellies on the commodity exchange has to do with farming hogs.

This thread is about if it still pays off to buy a new farm + some land and start to breed pigs, if the food will be 2% more expensive each day. Wink

njloof

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Activity: 73

Merit: 10

Quote from: JJG on May 05, 2011, 02:51:17 PM

Quote from: slurch on May 05, 2011, 02:43:50 PM

It's amusing to me...in reading this thread, you would think that there is absolutely no use for a high-end graphics card other than Bitcoin mining. This doesn't seem like 100% solid logic.

If you're a gamer looking for a new card, then by all means go for it! Bitcoin mining would effectively be a discount on money you would have spent anyway. No one will argue this.

This thread isn't for these people. This thread is for the non-gamers snatching up GPUs and considering building second computers (motherboard, CPU, RAM, PSU, etc.) for them.

100% logic here.

Well, if you're looking for a gaming thread, you're on the wrong site.

I think the comparison is false regardless. Currency speculation has as little to do with mining as buying pork bellies on the commodity exchange has to do with farming hogs.

slurch

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Merit: 10

Quote from: proudhon on May 05, 2011, 04:51:39 PM

Quote from: JJG on May 05, 2011, 04:38:43 PM

Quote from: slurch on May 05, 2011, 03:07:26 PM

I'm betting on some reduction in difficulty after the OC.net people get bored. Since a lot of them are gamers, I don't imagine that will take all that long (I saw that thread you mentioned...it was very sad).

Difficulty reduction won't happen any time soon. I think you're overestimating the number of OC.net people who make up the entire network hash rate, and underestimating how desperate some of these guys will be to pay back the hardware they purchased.

OC.net is just one forum and I doubt it's the last one that will have a 'bitcoin revelation'. Expect more jumps in difficulty as more forums catch wind of this.

I've got a hunch that after this next difficulty increase the percentage increase to the difficulty after that won't be quite as big because the big leap coming up in a few days will scare some people off. But, who knows.

I'm not ascared. I just know that the 2.5-3 BTC I get a day will probably get cut in half or worse in the next six weeks. I can live with that. Undecided

proudhon

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Quote from: JJG on May 05, 2011, 04:38:43 PM

Quote from: slurch on May 05, 2011, 03:07:26 PM

I'm betting on some reduction in difficulty after the OC.net people get bored. Since a lot of them are gamers, I don't imagine that will take all that long (I saw that thread you mentioned...it was very sad).

Difficulty reduction won't happen any time soon. I think you're overestimating the number of OC.net people who make up the entire network hash rate, and underestimating how desperate some of these guys will be to pay back the hardware they purchased.

OC.net is just one forum and I doubt it's the last one that will have a 'bitcoin revelation'. Expect more jumps in difficulty as more forums catch wind of this.

I've got a hunch that after this next difficulty increase the percentage increase to the difficulty after that won't be quite as big because the big leap coming up in a few days will scare some people off. But, who knows.

slurch

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Activity: 70

Merit: 10

Quote from: JJG on May 05, 2011, 04:38:43 PM

Quote from: slurch on May 05, 2011, 03:07:26 PM

I'm betting on some reduction in difficulty after the OC.net people get bored. Since a lot of them are gamers, I don't imagine that will take all that long (I saw that thread you mentioned...it was very sad).

Difficulty reduction won't happen any time soon. I think you're overestimating the number of OC.net people who make up the entire network hash rate, and underestimating how desperate some of these guys will be to pay back the hardware they purchased.

OC.net is just one forum and I doubt it's the last one that will have a 'bitcoin revelation'. Expect more jumps in difficulty as more forums catch wind of this.

Again, you are probably right. Still, there were 160 pages of comments in just two days before the mods over there shut it down...seems like a fair amount of interest in a short timeframe.

JJG

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Merit: 20

Quote from: slurch on May 05, 2011, 03:07:26 PM

I'm betting on some reduction in difficulty after the OC.net people get bored. Since a lot of them are gamers, I don't imagine that will take all that long (I saw that thread you mentioned...it was very sad).

Difficulty reduction won't happen any time soon. I think you're overestimating the number of OC.net people who make up the entire network hash rate, and underestimating how desperate some of these guys will be to pay back the hardware they purchased.

OC.net is just one forum and I doubt it's the last one that will have a 'bitcoin revelation'. Expect more jumps in difficulty as more forums catch wind of this.

Sukrim

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Quote from: slurch on May 05, 2011, 02:43:50 PM

It's amusing to me...in reading this thread, you would think that there is absolutely no use for a high-end graphics card other than Bitcoin mining. This doesn't seem like 100% solid logic.

Well, at least while surfing the web or doing some office work you can use nearly any current card to get enough bitcoins to cover your electricity bill for the time you let your computer run (and if you game for a few hours instead of mining, that is covered too, at least at the moment and if you use your computer for something else as well).
You won't get rich probably if you mine (especial with newly bought hardware) - however if you want to get rich, it has been already said that if you believe that prices go up, you're better off buying BTC instead.

tomcollins

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Quote from: slurch on May 05, 2011, 03:30:35 PM

I'm not a betting individual...I get queasy buying scratch tickets. I sincerely hope you are wrong, though. Sad

They did not have the same ethos that a lot of the people here do.

It's not exactly hard work to mine, though. As long as there is free money, someone will be after it. If selling becomes too much of a pain, they might stop. Or if the price crashes.

slurch

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I'm not a betting individual...I get queasy buying scratch tickets. I sincerely hope you are wrong, though. Sad

They did not have the same ethos that a lot of the people here do.

tomcollins

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Activity: 182

Merit: 101

Quote from: slurch on May 05, 2011, 03:07:26 PM

Quote from: JJG on May 05, 2011, 11:48:19 AM

The next difficulty increase is already projected to be an incredible 37% now!
For prospective miners: Whatever your projected income is right now, multiply that by 0.73 and that's what you'll be making in 4.5 days. If you ordered a card at this very moment, I doubt it will show up before this difficulty increase reduces your profits to less than 3/4 of what you'd make with the same card today.

I'm betting on some reduction in difficulty after the OC.net people get bored. Since a lot of them are gamers, I don't imagine that will take all that long (I saw that thread you mentioned...it was very sad).

I'd love to bet against this if you want.

slurch

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Activity: 70

Merit: 10

Quote from: JJG on May 05, 2011, 11:48:19 AM

The next difficulty increase is already projected to be an incredible 37% now!
For prospective miners: Whatever your projected income is right now, multiply that by 0.73 and that's what you'll be making in 4.5 days. If you ordered a card at this very moment, I doubt it will show up before this difficulty increase reduces your profits to less than 3/4 of what you'd make with the same card today.

I'm betting on some reduction in difficulty after the OC.net people get bored. Since a lot of them are gamers, I don't imagine that will take all that long (I saw that thread you mentioned...it was very sad).

slurch

member

Activity: 70

Merit: 10

Quote from: JJG on May 05, 2011, 02:51:17 PM

Quote from: slurch on May 05, 2011, 02:43:50 PM

It's amusing to me...in reading this thread, you would think that there is absolutely no use for a high-end graphics card other than Bitcoin mining. This doesn't seem like 100% solid logic.

If you're a gamer looking for a new card, then by all means go for it! Bitcoin mining would effectively be a discount on money you would have spent anyway. No one will argue this.

This thread isn't for these people. This thread is for the non-gamers snatching up GPUs and considering building second computers (motherboard, CPU, RAM, PSU, etc.) for them.

100% logic here.

Well, then how do I tell the forum to stop updating me on it? It's damn depressing. You all sound like my 7th grade science teacher. Tongue

JJG

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Merit: 20

Quote from: slurch on May 05, 2011, 02:43:50 PM

It's amusing to me...in reading this thread, you would think that there is absolutely no use for a high-end graphics card other than Bitcoin mining. This doesn't seem like 100% solid logic.

If you're a gamer looking for a new card, then by all means go for it! Bitcoin mining would effectively be a discount on money you would have spent anyway. No one will argue this.

This thread isn't for these people. This thread is for the non-gamers snatching up GPUs and considering building second computers (motherboard, CPU, RAM, PSU, etc.) for them.

100% logic here.

slurch

member

Activity: 70

Merit: 10

It's amusing to me...in reading this thread, you would think that there is absolutely no use for a high-end graphics card other than Bitcoin mining. This doesn't seem like 100% solid logic.

Sukrim

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If you want to do calculations yourself, here are some formulas (Things you need to insert/look up are marked with [these brackets]):

Income per day in your currency (for income in BTC just set the conversion rate to 1 or skip the last bit):
[Bitcoins generated per block] / ( ( [Current difficulty] *2^32) / ( [your hashrate in hashes/s - for MH/s multiply this number by 1000000]*24*60*60 ) )* [conversion rate to your currency --> 1 BTC = this much in your currency]

Income at day X in your currency if the network grows at a steady Y% and your hashrate stays the same:
[Bitcoins generated per block] / ( ( ([Current difficulty] * (1 + [growth percentage]/100)^[number of days in the future] *2^32) / ( [your hashrate in hashes/s - for MH/s multiply this number by 1000000]*24*60*60 ) )* [conversion rate to your currency --> 1 BTC = this much in your currency]

I hope it might be easier now to throw up LibreOffice Calc or Excel and do some calculations yourself with this as a start.

Topic: If you're thinking buying mining hardware, read this first - page 7. (Read 92715 times)