JJG, still when buying mining hardware an investor did not know that there will be 600% raise in bitcoins in a few weeks. From point of view risk/reward his choice was pretty reasonable (then). It is still rear view driving when you compare his profits with HUGELY UNBELIEVABLE 600% rise in a few weeks of a highly speculative market (bitcoin).
Considering that it is reasonable that the components of the rig could be sold for 80% of initial cost he only had 200-300$ at risk. People here compare it with much larger amount of money at risk in a much more volatile market for direct BTC investment. Risk/reward profiles of these two investments are rather very different. Less risk less reward is not something totally unexpected, is it?
I am not arguing with any side here, but the reasoning which is being employed in the argument by both sides is very very simplistic and with benefit of hindsight.
You saying that someone is about to make bad investment, but what if BTC exchange rate falls back to 0.70 tomorrow. It is not impossible. Which investment will be better rig or BTC?
I surely hope nobody takes anything said anywhere on this forum as an investment advise. Please nobody take anything I say as investment advise, because I am not qualified to give investment advise. I bet no posters on this thread are.
He said it took him 1 month to pay off his mining rig. If that 600% rise in BTC didn't occur, then it would have taken him 6 months just to break even on his mining rig. Actually more with rising difficulty and an additional 6+ months of electricity costs. Either way he was betting on BTC value going up, so your suggestion that it's unfair to factor that rise into this argument is baseless.
And like I said earlier, he made his decision over a month ago, which was an entirely different and much more forgiving mining environment. And he
still would have been better off buying BTC directly. Now it's much harder to make mining profits if you're buying expensive computer parts.
Here's my position: Don't invest anything you're not 100% comfortable throwing away into the bitcoin ecosystem. I don't think anyone will argue with that. My secondary advice is to invest intelligently if you're going to do so, and take the rapidly rising difficulty into account.
Go back and read my original post. It includes a list of many of the small overheads, risks, and fees that prospective miners might not take into account. It also details why rising difficulty could easily make your mining rig worthless in short order. It's all valid, logical, factual information. It was meant to inform. But for some reason that doesn't stop everyone from thinking I'm here with nothing but evil intentions.
