Topic: MINING BTC VERSUS DOLLAR COST AVERAGING (Read 251 times)

Hi anz888,

I'm running a facility in South East Asia. PM for details? I think the assumptions can be bettered.

thank you all for your comments and suggestions.
greatly appreciated..

ultimately for me yes, it comes down to stacking more sats. i am not really doing this to see profit in fiat. i want to profit and save in BTC
so it seems as though its in my best decision to not tie funds up in equipment, be subjected to rising energy rates [which are horrible at the moment for the purposes of mining at 0.16c] and just Spot Buy.

If you are using a mining calculator and the result is 2.15 BTC in 24 months that's not exactly what you can earn from the pool.

Actually, there are many types of pool payouts, and most miners mine on the pool that pays both block reward and transaction fees so the incentive you can get is the transaction fees.
Unless you mine on a different pool that only has a stable payout like PPS it doesn't include transaction fees unlike other payment modes like PPS+ which includes Block reward+transaction fees.

Better read more about how mining pools distributed rewards and transaction fees to their miners and different types of payment modes

was 16 cents ever good for mining BTC since the inspection of ASIC miners? I mean aside from the mania phases we had in every cycle where price goes up 2-5x in a few months before difficulty does, anything above 10 cents has always been risky despite the efficiency of the gear you mine on.

Before the China ban we know the average power rate for the Chines miners was anywhere between 4 to 6 cents (accounting for the rainy season and the 1-2 cents rate that lasts for a few months), now the large US corps claim they have rates as low as 3 cents, which makes the global average even lower compared to how it was 2 years ago.

So 16 cents didn't do well before the last halving and all the advancements in the mining sector, it sure as hell won't do good now, not even in ten years, in fact, as we move on, halvings will come, every cycle will suffer diminishing returns and mining's profit can only go down (ignoring the mania phases that last for 3 months or so), heck, I pay close to nothing for power and I question myself every time I decide to buy mining gears, let alone paying 16 cents.

16 cent power = no good to mine btc for a time it was good but it is a loser now.

eth was really good at even 25 cent power but now eth is no good.

At this moment in time miners are on very hard times.


5 cent power is a good number not 16 cent power.

In my humble opinion mining protects you (mentally ) from the BTC/USD price drops, as long as you have very cheap electricity.
You get returns during the bear market, even though they're small, but they are constant, although declining over time.
Generally, not too many miners join during the bear market, so you can collect substantial bag of BTC over time.
Later, when the price is high, you have the coins and the gear, which you can sell for double the price it cost you to buy.
As others mentioned - taking good care of the gear is the key, as it can suddenly break. But it is also usually not very expensive to repair in a bear market.

Option #3:
- Spend approx. 50k on BTC now (which will buy you approx. 1.7 BTC according to the current price)
- Use the rest of the money for DCA or buy in batches when the price is good

Using this strategy, you should be able to accumulate more than 3.41 BTC in two years, and, on the other hand, you'll be somewhat protected from price swings or if the price slumps further.

It was said many times before: investing and mining are 2 types of business, for different types of persons, for different mindsets. Both have their risks, both have their benefits.
Some prefer the apples, some prefer the oranges, others prefer both the same; it doesn't make one better than the other.
This being said, pick the one you think it's better for you.


PS. Some also compare holding mined coins with holding bought coins, but that's imho a mistake in the logic.

Seems your purpose is to know which can be more profitable for you in a long run between mining and DCA'ing. Both are profitable I would say, just depending on how you see your profit. But you should also know that most persons who can engage in mining do so at times not just because of the profit but also the technical knowledge and love they have for it, love most importantly because some factors can be discouraging but it takes a lot to continue. So I would say before you take a decision on which to do, take into consideration the love you have for each of them, and weigh your options. Nothing also stops you from doing both if it is within your means.

Actually, this topic was in a different section, and most of the comments are from speculators who have probably never owned a mining gear, I remember we had a similar one here which I can't seem to find, that one was jam-packed with info mostly posted by actual miners, I'll post it here if I managed to find it, meanwhile OP should try to search for it, it's here somewhere.


OP, this is an impossible-to-answer question, everyone will tell you a different answer and none of them is wrong/right simply because nobody can see the future.

If you were to backtest this question, you could easily cherry-pick periods were mining was better, and of course the same thing for the opposite side.

However, more often than not, buying BTC at a bear market (which we are in now) was a lot more feasible than investing money in mining gears.

The logic is rather simple, just look at the price history of mining gears price, electricity price, and difficulty.

It won't take you much to see that mining gear values are generally in a downtrend while electricity price and difficulty are on a general bullish trend, in fact, you don't even need to look at the charts to know that, but of course, those trends have ups and downs, so there are periods where the whole trend shifts, but betting against the trend usually doesn't do you good.

You are buying a piece of gear that loses value over time, which runs on energy that goes up in price over time, all at the same time while that gear is costing you more to run just to make less.

This is why timing is key (of course assuming your power rate is below average which is 2-4 cents as of now) don't ask me how but that's what the large us corps are paying (according to them).

So if your power rate is within a combative range, your chances get better, but even with that, as DaveF mentioned the gear could just die on you halfway, it could get to a point where it burns more power than it makes, so the risk is just way too high compared to the rewards.

Some people think the USD value is what matters, so they complicate things and usually end up getting to the worst conclusion, I think measuring your ROI in BTC is the way to go, because your gear is making you BTC, not USD, and with the current gear prices ROI is anywhere from 1.5 to 2 years assuming your power rate is somehow fine.

Now think about it, do you really think your gear will run for 2 years straight without an issue? also, I know people that bought S19s for 15k or nearly 0.5 BTC back then who thought ROI was 1 year, it's now 2 years and they are not there yet, why? well because difficulty just keeps growing, the 2 years turn into 3 years, and so on.

You need to get lucky to actually beat DCAing BTC by just mining it, of course, this is the basis of it, Phill and some of the other American friends have another important factor they like to add in which is tax, I know little to nothing about U.S tax so I can't explain to you how mining beats buying BTC with respect to the tax laws of the united states or wherever you live.

But my long story short, don't buy gears that are over 1 year ROI in BTC based on your current power rate, because your power rate will likely go up along with difficulty and that 1 year ROI will likely be at least 1.5 years which is still somehow doable, anything above that and you will very likely not make it out, not with the halving happening in 2024.

Take a look here for some discussion: https://bitcointalksearch.org/topic/mine-a-bitcoin-or-buy-a-bitcoin-5411000

In theory, with the cost of equipment, and the fact that miners do die / break so you can't be 100% you will even reach ROI never-mind generate a profit, it's a tough call.
Mining is not just about generating BTC, more miners spread out all over help to keep the network running. But, small miners are really in a tough spot at the moment.
Think about it before just jumping in.

-Dave

hi all,

i have been looking at this model and would like some other opinions about it.
i want to mine BTC however i cant seem to see feasibility as the numbers just dont add up..

My Aim: to accumulate as much BTC for the least available price

this is based on a 24 month period


Option #1:
- Spend approx. 50k on S19s 110th (which will purchase me 7 units here, $AUD)
- energy cost: 0.16c/kw
- approx. monthly energy cost: $2784.00
- giving me a hash rate of roughly 770

over a 24 month period i would have outlaid, my initial equipment cost of $50,000.00, plus 24 months worth of energy $66,816.00, for a total exposure of: $116,816.00
And based on my hash rate and some adjusted difficulty, i would have produced roughly: 2.15 BTC

VERSUS

Option #2:
- spend $100,000 now in full and buy: 3.41 BTC
- if BTC goes down, i still have 3.41 BTC, great
- if BTC goes up, the value of my 3.41 BTC has increased


my question is, based on the info above what is; my incentive to mine?
over a 24 month period, it seems the Buy Now option will render me owning more BTC than mining, will not expose me to energy rate fluctuations, and can liquidate for fiat fiat faster if necessary.
have i missed something in my analysis?

thank you in advance for taking the time to read this and helping