Topic: Mining as a race (Read 3808 times)

3 or 5 years from now....the following will have an answer.

"Holy XXXX! those people who have bitcoins since 2010 are..."

That's a fair point if you meant net. Lots of people want a magical money fountain, but if you are looking at this in terms of real investment (its more work than most real investments, but still) the returns have far far far far to go before they are so untenable as to be considered horrible in comparison to other investments.

From an investors standpoint... making even $0.01 USD per day from a $100 investment (5830) is an AMAZING return in today's market. You can't even get a GIC to give you 3.65% return...

This is far from over guys.

I spent thousands of dollars on hardware, and I'm currently sitting on thousands of dollars worth of hardware and more money in the bank than I started with. Lots of people looked at me with bemusement back then as well. Fact is we don't know what's coming up, and which people to envy and which to pity.

My only hope is as said above, people aren't gambling with more than they can afford. Don't risk your home/wife/kids over bitcoin.

Same here. I already had a gaming rig so all I had to do was sell my GTX 275 and trade up to a Radeon 6950 and I was in the game. Total cost = $100

Ive since made my money back (well I have if I was to sell a few of my coins at the current going rate) and anything else is pure profit.

I do however look at those people out there that have spent thousands of $$ on hardware with bemusement. 

I'm just so thankful that in 15 days, I already earned $350 from my two 6950s. This was right before the 50% difficulty. Now based on what I said about the difficulty, do the numbers then the next 15 days I will be earning $175 - by then I already paid off the first 6950 that I bought. I guess it depends on the miner but in my case, I'm not paying for my electricity since it's included in my rent payment

Big difference between should and will.

If Bitcoin has staying power I could see it but it could also die out and be worth nothing.  I'm waiting to see it gain traction which will require ease of use which I'm still not seeing.  When my wife is able to pay with bitcoins then I will say it will gain traction.

Yes, they will. 

Because bitcoin will get traction with the general public, more businesses will accept it and it is a limited resource.  Price should go up in the long term. 

(not sure about next week or next month, but long term it should go up if the project is a success)

I remember when it was 4-5$ with a 5870 on a good day, and that was months ago.

this is my plan to mine coins and hope it pays for a new rig i already had had 2 6950 unlocked so i bought 1 more and hopefully by the end of the month i can upgrade my PII 955be system to a nice SB

I'm with you, I just purchased a new computer at the beginning of the month and really the only thing I hope to accomplish with Bitcoins is to pay for the computer plus earn the interest the money would have made sitting in the bank account.

Really this was an excuse to convince my wife to let me build a new computer.

Every extra day I spend on this forum, this is my 3rd day, I find more and more miners who are sitting in the dark clueless of the bitcoin reality. Majority kinda understand we are on a race to bottom, but they still failing to see that the whole bitcoin mining network will still expand at a high rate, even if it gets down to 1% a day or even less, its expanding massively . This will keep difficulty going higher WHILE price even at the best scenario wont follow because NOTHING in the real world can move like the formula for difficulty is moving every 10 or so days.

Many people are asking, who will mine in this situation. Answer is simple. Whoever got their hardware paid off can mine all the way down to the cost of electricity. Then there are others, newcomers, who will speculate that bitcoins will eventually be worth more in the future, BUT lastly the biggest group everyone is missing right now are just randoms, who already have radeon cards but they didn't know about this hole thing until they somehow find it while the whole network will keep on growing on monthly basis.

I'm sure we aren't even using 0.0000000000000000000001% of radeon power connected to the internet right now, who just sits idle doing nothing. In the future if they will like the bitcoin idea they will run miners while being idle just for the kicks if that's a right term. None is really bothered  with lets say $10 extra monthly cost for electricity if they will like the bitcoin movement and this group will in the end get us to 21mill coins, it wont be dedicated miners running 50Ghash, 25 computers solely for mining purpose.


Eventually if bitcoins are excepted by a larger group of people, lets say 100mill worldwide, who will use it on daily basis, YES, the price will certainly be higher, a lot higher per coin, but NOWHERE even remotely close to what it should be as a ratio to difficulty, like we had it until this difficulty move, when it was still generating bigger profits then the money put in to generate it.

http://media.tumblr.com/tumblr_ll1fbeAgxU1qcx0d3.jpg

Do you really think people are going to ever pay $200 for a Bitcoin?  WHY?  

What can you do with a Bitcoin anyhow? They're mostly just valued by miners (for what they can sell them for) and speculators (who hope the price goes up so they can cash out and make a quick buck)

Oh, and drug dealers.

Assuming you're not into Alpaca socks, there's not much you can actually BUY with them.

Seriously, it's hard to believe the BTC is even worth $20. Have you noticed it stabilized quite a bit in price in the last few days?

Matthew

Meh, I'm not a racist. I just mine as long as the cost outweighs electricity expenses.

If it ever goes below that point, difficulty will adjust downwards most likely.

The OP's blindside is that he's failing to take into account the fact that bitcoin's price could be dramatically different in the future.  Sure it might be ~$20 today for 1BTC, but are you do you really know if it might or might not be $200+ say two/three weeks from now?  I'm no econ major, but considering the exponential price increases we've observed all but of late, I'd say $200, or maybe even more, is not entirely out of the question a few weeks from now.  If that were to happen, a lot of people'd be dead sorry they gave up mining around this time.

Of course, therein lies the rub.  The price could also tank pretty drastically in the future.  No one really knows.

Also, I think the answer to the question, "Should I start mining" is different based on your situation.

Do you have lots of spare PC parts sitting around?
Do you have more than one PC in your house with PCI-E slots?
Are you a long time PC tech?
Are you a Linux guru?
Do you work from home (or are you home all day)?
Do you have a few hours a day to devote to it?
and, most importantly....
Do you have some spare money sitting around, that you wouldn't mind losing?

Just like house flipping makes sense for some people (jack-of-all trades handymen, for example -- they buy a fixer-upper and sell it after it's been fixed up), while it's true that when EVERYONE is doing it, it's just an unsustainable bubble.

When bus boys are talking about how they're flipping houses, you knew the bubble was about to burst.

But a handyman who can do *much of the work himself* could (and still can) make money by intelligently buying a house here or there. The same applies to mining.

Yeah, anyone buying new hardware today to mine hasn't really thought the problem through.  They're wasting money.  Even those who have paid off rigs and are tempted to get another card are almost certainly throwing money away, unless they're happy to extract money at a rate of $1 per day per GPU in a month's time.  It's a race to the bottom and tragedy of the commons all rolled into one.

We already have enough bitcoins and miners in the system to satisfy all the speculators' needs.  The only group of users currently employing bitcoins for real world goods and services are on Silk Road.  Everything else (web hosting services, etc) are just fluff.

I don't think very many people understand the RACE aspect of Bitcoin mining.

Those who started out sooner are at an advantage, since they have more rigs, experience, knowledge, and have paid off more of their hardware.

Another thing people don't understand -- enough mining power can come online to make mining unprofitable for new entrants EVEN WITHOUT a revolution/paradigm shift like ASICs or FPGAs.  No, just with regular ATI video cards, existing miners can keep buying them (because they're "free" for them) and bring the difficulty up, up, up until a 5830 makes you 50 cents USD a day.

Right now the famous 5830 brings in 0.26 BTC (or $5.13) a day, assuming a hashrate of 255, and a BTC price of $19.70.

Remember when it was $8, or $12 a day?  It's going to get worse.  And don't think that means a 5830 will be paid off in 22 days. During that time, difficulty will increase at least three times. And you can't mine with a $110 5830 alone (assuming you can get one for $110!)
You need at least *some* PC hardware as well. A lot of people have older PCs or current PCs -- but they unknowingly -- well before they found out about Bitcoin -- bought a "Micro ATX" board with only 1 PCI-E slot (like I did!) And graphics cards *do* require a good power supply. Most power supplies laying around or available for cheap/free are 250W, 300W, 350W, 430W, etc. and that won't do for mining. You need a 450W minimum for 1 card, 750W for 2 cards, or 1000W for 3 or 4 cards. Good PSUs aren't cheap!

And let's not forget that the 0.26 BTC/day figure for the 5830 is GROSS profit, not NET. It doesn't count expenses (electricity, time).

Matthew