Topic: Not worth mining any longer for anyone not already in. Am I wrong? (Read 4533 times)

Sorry for the late reply to this quote but, what's wrong with filing 1099s? Done it before & I don't mind paying taxes. I don't look at mining & mining speculation as a way to *hide* money from the Feds (but I do see it as a way to maintain & build wealth, like other securities). I, for one, do like having lights that work, streets that are paved, etc., etc.. due to taxes paid by citizens. Not saying we should grab everyone's wealth & re-distribute it, but we all have to and should pay our fair share of our local, state, and fed. taxes. It's one of the things we miners & investors have to do to make BTC really take off & be legit.

I've seen documentaries of places where true anarchy rules, like Somalia. It's not pretty.

Yes, I sold the bitcoins and converted them to my local currency.  Once the money arrives in my bank account it's a little hard to hide the income from the government    I don't declare bitcoins still in my wallet as to me, they're like shares or a brick of silver with constantly fluctuating value. 

The picture of the chip on their website is a fake.

This logic would work, if bitcoin wasn't taxable. Theoretically it IS taxable income the moment you convert it to USD.   For now, you most certainly can pay for goods and avoid income taxes with the coins you earned but it would be foolish to assume this is "tax free income".

Today there was a court ruling that Bitcoin denominated investments were in fact securities and would be treated as such.  https://bitcointalk.org/index.php?topic=269612.new#new

This means that those bitcoin dividends you are talking about spending, those are coming from a security in bitcoins.  That security in bitcoins now needs to obey SEC rules and regulations. The exchange offering those BTC securities also needs to obey rules and regulations.

The implication here is that dividends, are 1099-DIV income.  If you are being paid dividends that's taxable income.  It may not be today, but it could definitely be backdated and reported to the IRS if companies like ASICMiner are now required to comply with regulations....

Buyer Beware.

I'm told my 50GH/s unit is "Complete": http://www.reddit.com/r/BitcoinMining/comments/1j71eq/so_im_told_my_upgradable_50gh_1k_asic_clone_order/

No updates since.


Stay away! Until you hear of someone receiving an ASX unit, don't send them a Satoshi!

It won't be a death spiral if the coin goes up or the cost of ASICs come down.

This is the death of bitcoin imho. Miners have been the mainstay of the legal bitcoin economy as they have amounts to spend and therefore it's worth people accepting it. Now that it's impossible for new miners to get onboard, they'll be fewer transactions and therefore less fees, fewer people to accept it, etc.

There's a bubble for hardware, because now you need ASIC to generate the same return as a GPU but even this will be obsolete pretty soon because of colossal jumps in difficult - it's the death spiral, the more you so spend, the sooner the end and therefore the more you lose.

Never heard of ASX Project before but there site indicates they have 150Gh/s units in stock.  Is your 50Gh/s unit being shipped now?

wrong

if bitcoins were still worth $35 usd, it would have been "not worth mining any longer" a long time ago

but they aren't worth $35 anymore



the point here is to just keep a balance of bitcoins for the liquidity and developments in the exchange rates

just out of curiosity, that means you sold the bitcoins for USD then, correct?

i was under the assumption that bitcoins themselves weren't counted as income

ROI achieved on Jalapenos received in early July, including electricity, interest, and tax (yes, income tax on income earned).  Paid with USD$ and have now received more USD$ than previous input.  Mission accomplished.

 Anyone buying an ASIC today needs to have fast delivery.  BFL will in the very best scenario ship new 5Gh orders made today by the end of September.

I have a 2.5 Ghash/s GPU setup. Will continue to mine until difficulty hits 60M (in 2 months?). Just happy to support the network.

I bought a 6.5 (4.5Gh + 2Upgrade) Jalapeño when 1BTC = 126 USD

I've paid 278 USD total (included shipping) and I have to pay 50 USD at customs when it arrives (if it does ever)

If the coffee warmer is able to mine 2 BTC at free electricity, I'll be happy

As for myself, in the BTC world I have a # of bets.

1 that went badly & is most likely gone to ASX project: 50GH/s
1 to BFL (2 Jallys): 10GH/s
1 to Bitfury or KnC: 50 or 100GH/s
Total planned: 110-160GH/s, on hand: none

Got enough funds I can afford the 50GH/s BF or a 100GH/s KnC. Bitfury will most likely make early Oct. & it's upgradeable to 400GH/s which helps for planning against obsolescence but KnC gets you 50GH/s more for only $200 more *if* they can meet their schedule. Dilemma, dilemma.

BTW, flipped a Jally I got for cheap & I nearly made ROI on the pre-orders I've made even including the ASX Project noobtastic brain fart!  

I'm long on BTC. Also own 1.01 AM shares because I like the dividends aspect and that they re-invest 25% to new TH.

Something to consider about BTC earned via dividends or mined versus earning an income that's immediately taxed.

- Let's say you spent $100 on the latest e-doodad at the Nile e-superstore. To have spent that $100, unless you're Mitt Romney or in his type of position, you're getting taxed at anywhere from 25-40% if you're like most people. So to have purchased that $100 worth of electronics you had to have labored to earn $125-140 depending on your tax situation.

- Now say you mined a Bitcoin or got paid in BTC dividends. Who knows how long it took but you have a Bitcoin. If you were to purchase something with that coin, currently valued at about a $100, you've essentially purchased something that would have really cost you $125-140 pre-tax.

Of course, purchasing something with that coin has an intrinsic opportunity cost that offsets the tax advantages: you've decided that whatever you've decided to purchase with that BTC at that moment is worth more than that particular BTC's future value - regardless of one's position on the viability of the longevity of cryptocurrencies like Bitcoin.

I don't understand all this halabalu over being so worried about making your profit. Unless the entire BTC market crashes you'll still make money over a period of time, it just gets longer and longer.

This is how I look at things. I almost buy nothing in my life that generates money. Let me clarify, I don't own anything that just sits there and generates some form of income(except now of course). With that said I could care less if I'm going to make a huge profit, because after the initial investment I have passive income as long as the market doesn't crash.

I'm not worried about ROI or trying to make my money back the first month. It seems that is what every one tries to do here is hope they are going to make every penny they dump into mining back instantly the first month. If you think that your just stupid. Unless you spend a ton of money doing so then good for you.

To me this is more so a hobby and something I can be productive with and I like that. Almost more than I like making money. This preoccupies my time and is a great conversation starter. The fact that I have asics and that I generate money off them each month is fine by me.

Did I make profit the first month, hell no... the second.... nope..... But I'm still making passive income now that I never had before from spending a few hundred dollars. and the best part! I can decide to spend it, or roll it over for more income a month.

Well, yes I agree that bitcoin mining is a business and now it is essentially for deep pocketed professionals.  Those who have the funding to put up the $50 - $100 thousand for a minimum of 1 TH/s of hardware plus operating costs.  If KNCminer keeps its word about shipping no product in Dec, Jan, and Feb we may be able to recoup the ROI during that time span.  That is if the other major hardware vendors agree to stop shipping during the same time frame also.

I see that diff jumped ~18% this morning to 37392766 and as I remember it was July 22 or 23 or about 11 days ago when it went from 26 million to 31 million or ~18% then also.  So in the last 22 day difficulty has jumped ~36%. I extrapolated this to an increase of 18% every two weeks and came up with a difficulty of 200+ million by the end of 2013.  I know that this does not consider the new ASIC hardware coming online. So we most likely will be looking at about 500+ million by the end of this year.  Like I said above only those with DEEP pockets will still be mining by the end of the year, or we will be looking at using contracts or shares to participate in the bitcoin mining side of this adventure.

Lloyd

No, you have to treat it as a get-rich-quick gold rush. The difficulty keeps increasing. Collectively, the total revenues of all miners have a hard limit.  That total revenue per month declines each month. Any edge you have in hardware only produces profits for a short period. There is no long-term business in Bitcoin mining. Bitcoin is designed that way.

the problem is that we are buying money to make money

That's correct.  First to market has to reap the benefits, that's the only incentive for even attempting to be first at something unproven.  Granted, everything about bitcoin is speculative.  It's a new currency, only a few years old.  It still has limited adoption rate and usability given comparison to the rest of the world.  And it is exceptionally volatile, easily trading in -+ 10% a day.  

With all that being said, speculative can also be extremely lucrative.  Bitcoin has established a pretty solid history, it averages somewhere between 30k and 50k transactions a day.  The current price has actually hit a floor around 70/coin and rebounded from there.  It has peaked around 260/coin and is currently facing a ceiling at approximately 111/coin.  

Take a step back and look at the market as a whole and you see that a large amount of USD is constantly being pumped into BTC right now.  MTGOX CEO made a statement in April in an interview that between 300-500k was being withdrawn for every 1-3m coming in.  ASICS purchases are direct investments into the Bitcoin economy.  There has been millions spent on ASICS in the last year, probably in the realm of 50-100m at a minimum.  This has a positive impact on the price of bitcoins.  When bitcoin spiked to the 260 level in April, it was shortly after the introduction of ASIC miners into the community.

We can "Speculate" that growth will continue based on the current trend line.  That would indicate the price of BTC has to rise.  As adoption rates continue in businesses across the globe and BTC finds more uses, you will see an increase in demand as well as an increase in transaction volume.  When demand rises on a limited supply, you will also see a price increase.

The point here is that this is a speculative investment.  It's not a foolish one if you understand the risks, BTC could suddenly see massive regulation, drop to less than 25/coin, and all these ASIC's would be far from profitable.  Such is the risk you take, tread carefully.