Topic: Isn't Mining Economically Retarded? - page 3. (Read 5100 times)

yes, but don't you see the connection? The fact that you never got your miner is typical for this industry. People don't get their gear on time precisely because it is a very competitive market.  It is rare to actually order some mining gear, get it quickly, and make a positive ROI on it. 

Another advantage to mining is getting clean fresh coins that the money systems of banks and credit cards don't know you have.
That is priceless.

This used to be true before cloud mining. Not sure if it still is. But the thing about hardware is that you get the full price of 3 months mining at the current difficutly TODAY, for every unit you sell. So if you sell 500 preorders, thats a lot of money that you would never get mining.

If you buy one of those machines and it arrives within a few days and you mine with it for several months, you do get profit. But the variables are just impossible to gamble with.

You will never make any profit with cloud mining. Not by any calculation I've made.

I really wish I could mine again. But that ship has sailed. Instead I buy BTC instead of buying hardware. Usually its close to the amount of BTC that the logical life of the machine will produce, but you get it today. Also it is guaranteed, not dependent on the difficutly increase. When the value goes up, you're golden.

ok so i talked about the nature of POW mining but now ill talk about individual peoples mining in regards to return of investment

hobby mining is not really cost effective.(owners of only a few rigs)

people that buy single rigs do not get bulk discount and have to pay full delivery charge and are usually left to the 2nd or third batch after the main mining farms get their hands on units.

but if your a serious investor there are ways to cut the price of the units (bulk buy discount) cut the price of electric (business rate) and the delivery costs are split across multiple units. aswel as normally being front of the queue to start mining before difficulty changes too much

but even when not effective to mine in bulk. some large whale investors find it easier to buy X rigs and mine for 3 months rather than find exchanges with a low 'spot'(spread) price that allows multiple thousands of dollars purchase without affecting the price to much.

EG
just buying 200 coins can make the price of bitcoin move alot. so imagine if you wanted to buy 200,000

for instance if i wanted to buy 200k coins today. i would cause coinbase's price to go from $360~ all the way above $1000. meaning if i had lets say $72million, you would think that equates to 200k coins at $360.. but no,,, as soon as i start buying some the price rises thus by the time i have bought 2000 coins the price could be in the $400 price range. by the time i get to 4000 coins it could be in the $500 price range.. and thus with 196k coins to go, its becoming more and more expensive to just buy the amount of coins i like.

however by mining them i can grab coins and never need to touch an exchange, thus getting closer to the 200k coin figure i want, than i would have simply buying them.

Stopped mining about a year ago, also gave up chasing the latest alt-currencies due to the crazy number of clones being released every week. Thinks it's great as a hobby but for anything more it's easier just to buy btc from an exchange.

What would happen? I think mining would move from places with 2 cent electricity to countries where people earn $2 a day on average.

And to answer the OP's question, as a whole mining is not economically retarded as long as it is still profitable for some people (which may not include the average Joe).

Many people are still caught in their investment/return/profit loops.
They simply can't see beyond that, while they are at it.

The concept of mining in the long run is very simple.
It is an arms race for control of a first-of-a-kind global money system on the planet.

Large geo-political players will be competing with advances in technology and resources to dominate the mining space in the future. Think of it as expenses on army to protect your share of land. You don't normally get returns on investment in security, you get security as the end product.

EDIT:

Currently mining can be compared to hunting/fishing. Some people prefer to buy their food in stores, others like to spend their time and resources to find food on their own, while also mastering their skills. The food found in the wild, while more expensive, is often healthier than that in the stores, as it is free from taint of various E-additives. Sometimes it's not the goal of the game that is so precious but the game itself. You will see that in sports (and life).

As a thought experiment what would happen if world of war-craft gold was chosen to be the global currency? Would human labor be a better backing for money than sha256?

I;ve stopped minig a while ago. I'm also done with altcoins. And stopped trading. Now i just using bitcoins and dogecoins as money. Everithing alse i've dumped. Recommend you do the same.

it is an oscillating cycle. Miners are really profitable then miners go through a "winter" phase. Rinse and repeat.

1. If a miner was more profitable than the price payed, wouldn't the mining companies use them instead of selling them?
Mining *has* to be profitable or nobody would mine. You still need to covert to fiat to cover operation cost like paying for electricity where they only accept fiat. When the miner needs to eat food, not all eateries or restaurants accept bitcoin. The portion that he keeps will be betting on future price increase.

2. If a cloud miner was more profitable than the price payed, wouldn't the mining companies use them instead of renting them?
Ok now for this, it depends on how you look at it. selling cloud mining actually works more like betting on the future of bitcoin and take your gamble against difficulty changes and other scenario like for example mining yields getting higher due to other pools of miner exiting.

1. If the miner cost them $600 to make and they can sell it for $1,200 immediately, they mostly would rather make the immediate profit instead of taking a risk, although many of them also mine.
2. If you have to remember immediate profit vs risk of increasing difficulties
3. Usually, yes. There are many exceptions though. Such as an early BFL jalapeno was super profitable, same with an early Antminer S1 (especially overclocked) and a few other miners (Neptune? I don't remember) were super profitable for a long time.\

I personally stopped buying miner and I now just buy BTC directly due to hashrates increasing too fast and not getting a > 100% ROI

The question of risk was with regards to competition, the rising hashrate and diminishing returns. The risk in mining is from criminals and scam companies.

There's financial risk, then there's the risk some motherfucker is waiting around the corner for you with a sawed-off shotgun ready to decapitate you for the 20 in your pocket.

In my opinion I don't think it is, it's more of technical opportunity for the facilitated people.

You should have been around in 2010 or earlier when mining was even less profitable than it is now.

@notbatman,

seems like you're contradicting yourself here.

You are losing money on cloud mining, you got
screwed basically ordering mining gear,
and yet you dont agree its less risky
to just buy Bitcoins?

Yes.

I paid for a miner in November 2013 with delivery in February 2014. To this day I have not received a miner or a refund.


Yes.

I just got 23.5Gh/s on CEX.IO and after mining for about a day my balance is -0.00001348 BTC. CEX gets paid up front for the GHS/BTC, has kept all the mined BTC as maintenance fees and has virtually mined 1.3k Satoshis from my account. I now owe them additional BTC ontop of what they've mined with their hardware.

Cloud mining is icing on the cake.


No.

If you're mining and the fiat exchange rate goes up you make more fiat. If you're mining and the fiat exchange rate goes down you make less fiat.


Everybody is entitled to their own opinion.

Are you missing something? Well you seem to have a lot of questions, this is good. I should have asked more questions before my purchase.

I thought so. That's why I stopped when I couldn't get a reasonable amount using video cards. The ASIC upgrade train seemed like a stupid ride to poverty. Buying btc is so easy compared to the hassle of maintaining equipment.

I don't think the OP is talking about how "green" bitcoin mining is, I think he is referring to how much economical sense it is to buy a miner.

extrapolate in future and it can easily eclipse all of those.. It is economically retarded I agree but its just a consensus algorithm.. In the end the blockchain is the takeaway to all of this.