Topic: making a living mining? (Read 4279 times)

When you say "get the tax back on the purchase", are you talking about sales tax?  Remember, not everyone even pays a sales tax to start with.

Certainly the miners could be set up as depreciable assets, but the net tax effect will be virtually the same as just expensing it all in one year for a simple company.  If you take the expense of the miners all in one year, and you don't turn a profit, you'll end up with a tax credit which can be used in future years to offset taxable revenues.  I think up to 7 years in the future.

I've heard of one member of this forum setting up a company and buying some FPGA miners and mining for profit. If you arrange your taxes in a clever way not only can you get the tax back on the purchase of the mining rigs but you can claim depreciation of the assets too.

Electricity is also a cost which you can incorporate. In the first year, with the purchase of the hardware, you will not turn a profit which means more money back from the tax man!

very clever stuff...

I think the ones investing 10s thousands are the ones that already made 10s thousands when BTC was worth $30. I doubt someone new entering the business will invest $10s thousand right from the start.

Evidently the OP's question was well-timed. There goes the neighborhood

Announcement: A public company is being formed to enter ASIC Bitcoin Mining marketplace.
https://bitcoin.org.uk/forums/topic/486-announcement-a-public-company-is-being-formed-to-enter-asic-bitcoin-mining-marketplace/

thanks for all the info guys. i'll consider it more as a supplmental income then... which is, of course, always good. that is assumign the math with my power cost works out. until then the PC i use can keep up it's mining.

If you look around there are people investing 10s of thousands of dollars (probably much more) into this endeavor. It's get in big and get in quick or don't play at all. Exceptions being if you already own equipment outright and don't pay electricity

I'm rollin' in the dough right now; I make about 30 cents a day!

You cant really in the UK as it costs 16 pence or 25 cents per 1kw hour. Wish I lived in a low cost US state .

June 8th I believe it was and it was a wonderful time I was making like 5x what you were but was doing the namecoin deal at that time we were getting 2x, 3x the return of BTC by mining them and trading for BTC until the boys caught on to that and ruined it.

Middle of June IIRC.  It was when the price hit its peak of $31... difficulty was still low enough that 1.8 GH/s was making me 3-4 BTC/day.

Yup, some time last year I started CPU mining with about 16 Mhash/sec. I was making more per day than I make now with 340 Mh/s. My total capital investment to switch over to GPUs was zero as I already had ATI video cards in two boxes here which serve other purposes 7x24 and are not in any way dedicated to mining.

Obviously, I'm only a hobbyist. Mining has provided me with a few bitcoins to play with. I just point my miners right at a Bitcoinica account and mostly maintain a flat position in dollar terms by shorting an amount equal to my BTC balance, a condition which also earns a little swap along the way.

Without even running through some numbers my first concern would be the time required for recovery of initial investment.

Recall that the unbounded arms race model of bitcoin mining is such that as capacity is added to the network the payout per hash decreases. Any revenue projections based on current results should be discounted for this fact, the problem would be what rate to discount them at.  Worst case, some technological shift like ASIC greatly increasing the global hash rate could leave you with a bunch of lumpy hot plates that have absolutely no alternate utility. When CPU mining was blown out of the game by the higher hash rates of GPUs, at least CPUs were still useful or resalable.

I would also want to anticipate the halving in mining yield that is anticipated to take place in the latter part of 2012. I've seen some rationales here that would have the value of a bitcoin automagically double to compensate for this, but you might as well expect it to brutally blow out less efficient miners first, for example ones who had bought FPGAs before ASIC takes over, if it does.

So, my didn't-run-any-numbers suggestion would be to:
1) Plan on full cost recovery within 6 or 7 months in order to avoid The Halving Of The Bitcoin completely.
2) Project a declining payment rate per hash over time. A straight line between the current rate and half of it would be an overly conservative projection to the time of the Halving were the global hash rate to remain constant. This is only because I have no clue as to what a reasonable projection of global hash rate growth might be.

I'm not saying you shouldn't pursue this or that you can't make money at it in the near future. If you are really thinking about living on mining proceeds you need to consider time frames and declining mining revenue over time in your analysis.

not as a hobby. IMO, it's getting to be a pretty big business.

If everything (price, difficulty, reward per block, total hash rate) stayed constant for the rest of your life then it would you could make a living for the rest of your life off bitcoins. None of those things will remain constant though.

It would take longer to pay for its self but I think the warranty is longer than the BFL (?) plus if the difficulty goes right up or the price drops right down you'd still be profitable below $1 a BTC or $2 BTC once the block half's in December.

interesting. well, clearly it warrants further research then. also, looking more at the x6500's then the bfl's, i think. better power draw.

You would have to think about replacing the boards as the BFL warranty is only six months and no one has had one running for seven months yet but they are some boards available with two years warranty with lower power consumption but there more expensive.

Dude!  When were you making $100/day?

Even if I mined with a single 5850 with the whole PC pulling 200w, It would still cost more on electric.

You certainly can.  But it involves a lot of risk too, since there is no guarantee of those profits in the future.

In the peak of my GPU mining, I could make $100/day.  Now, I am making $6/day, and more than half of that goes to pay the electricity for them.  And that return will get even lower as more of these more efficient miners start being used.

so i've been reading the mining forum here for a good long while, and i just want to verify something: it seems to me with the right rig setup, namely a few fpgas, it would be quite possible to make enough to comfortably live off, meaning like 2000 USD a month.

yes, at $100 a month (as i saw mentioned for a BFL single are current prices, approximately anyway) that would be 20 fpgas... but buy one, wait 6 months until it earns enough to buy a second, wait 3 months, buy a third, etc... in theory within, say, 1.5 years or so you could be set, off of just the initial FPGA purchase.

am i right that this is possible, and people are making a living as a bit coin miner, or am i blind and stupid and missed something obvious?