Topic: Reliable comparison between mining vs. buying and holding (Read 4531 times)
Mining is not very much profitable this year as too many miners are looking for their Bitcoins. Mining might be profitable to get Bitcoin Gold and DASH, ZCash. Buying alts and BCC is better — especially when the cryptos are down. Trading as for me is the best variant.
I constantly hear people arguing for mining as opposed to buying and holding or vice versa as better investment strategy - is there any reliable source of information that compares the two over an extended period of time?
Why would anyone need reliable source for this comparison? This is kind of question which depends on the practical approaches that different investors and miners have made in reality. Now take my example, where I will prefer to invest my money into buying and selling the coins because that is what I like and I can make profit in that way more easily.
When it comes to mining, then I’m not the right guy for it so I don’t and I will never be able to make profits from it. Thus it gets me clear cut idea that mining is not type but the crypto investment is.
So different people different views and for your own decisions you should check your right way to do it.
There's no need to compare the two because both actions will yield the same result - profit. However, if you're going to take at it seriously, mining is quite more complex and difficult compared to buying and holding. Mining requires durable and high equipment and facilities, and cost of electricity to start with. But this can be quite expensive and will need the owner to have adept knowledge in mining. Meanwhile, holding and buying only requires research, money, and a little risk, as well as the ability to read and predict the market chart.
Reliable ways to compare these methods no earnings. The profitability of production is constantly changing. It may happen that you will get so much coins to pay for electricity. But as diversification of income sources is the right decision. I have always been a part of their income, investing in the acquisition of the GPU.
Mining is best to carve own coins but that is time taking process and its requirement is also high whereas investing money and buying a bitcoin is now reliable to most of users because everyone want easier way to earn money and buying is best way those countries who adopted bitcoin in early days their citizens are now mining but those who are getting familiar to it now are preferring buying and investing to earn money.
Minning is not a sure fit process...
You do need to be very damn stable to be able to consider it an option..
Its like in minning you aren't even sure if you are gonna grab the profit tomorrow or not..
As far as holding bitcoins is considered... i don't recommend holding bitcoins for such a long period.. yes it is beneficial for a short while... You should hold ypur bitcoins till.. 4 -5 months then cash them out or a small amount periodically...that way you would never be at a complete loss...
Then the next thing is buying bitcoins.. Buying bitcoins is sometimes very risky... It is beneficial while a dip offcourse.. but... If you plan on buying during a high then there won't be much profit that you would be able to grab...
Also buying works when you think about buying a big amount only... Because buying and selling rates do show a big difference..thus buy during a dip and have plenty to invest and everything will be alright...
You do need to be very damn stable to be able to consider it an option..
Its like in minning you aren't even sure if you are gonna grab the profit tomorrow or not..
As far as holding bitcoins is considered... i don't recommend holding bitcoins for such a long period.. yes it is beneficial for a short while... You should hold ypur bitcoins till.. 4 -5 months then cash them out or a small amount periodically...that way you would never be at a complete loss...
Then the next thing is buying bitcoins.. Buying bitcoins is sometimes very risky... It is beneficial while a dip offcourse.. but... If you plan on buying during a high then there won't be much profit that you would be able to grab...
Also buying works when you think about buying a big amount only... Because buying and selling rates do show a big difference..thus buy during a dip and have plenty to invest and everything will be alright...
Reliable ways to compare these methods no earnings. The profitability of production is constantly changing. It may happen that you will get so much coins to pay for electricity. But as diversification of income sources is the right decision. I have always been a part of their income, investing in the acquisition of the GPU.
I constantly hear people arguing for mining as opposed to buying and holding or vice versa as better investment strategy - is there any reliable source of information that compares the two over an extended period of time?
We can consider the mining and buying as different things. Different rate of earning will always be achieved with these two ways of earning. The fact is simple, in buying and holding everything relies on the market capitalism achievement and decision of big investors being on the same page could lead to generous leads in the revenue. Also, in case of mining you have to bear the indirect cost of the miners, electricity and maintenance but it is eventually surpassed and whatever you from there onwards is your 100% profit. So I believe that both of them are having different ways of getting money back and it depends on us how we manage the whole thing.
OK xhomerx10,
I see your point and have made some adjustments to my table to simulate a more realistic projection following a gradual drop in mining earnings with increasing mining difficulty over time. Thanks for highlighting it! I will entertain the idea and assume we have no plans of building bigger hashrates over time (even though we have plans to be Top 5 by next year), and other smaller miners don't fall off and quit from mining due to the increase in mining difficulty in the years that follow.
If this is still not "reliable" (which I think is a pointless term to use in this sort of comparison since all figures are speculative at best), by all means just use a lower figure of your choice, or just buy-hold and don't mine at all. Just remember that for the buy-hold column on the left, the later you buy and hold, the higher the price of bitcoin will be, and if someone were to buy bitcoin at the end of this year if or when 1 btc = $4,000 or $5,000, it would be less than 1 btc on the left column, but the mining column on the right remains the same.
You can view the revised table at the same page at http://www.coinpurveyor.com/buy-hold-vs-mining-bitcoin/.
I have retained the same conservative estimate of 1 btc = $50,000 by 2024, instead of $500,000 or $1 million as some people would like to think. Again, feel free to use higher numbers here that seem more probable to you, but you will notice that just using 1 btc = $100,000 in 2024 now brings us back to the earlier end figures in my original table with constant returns yearly (which is why I think "reliable" is a pointless term and why my tables were just supposed to show the advantages and merits of mining over buy-hold and not how much dollars you can potentially make).
Now, let's go through your concerns one by one:
1. Our so-called "cloud" mining site allows members to opt out from the programme and reclaim their mining hardware by writing in officially. The individually-numbered mining hardware will then be unplugged and delivered to the member. You can't do this with a real cloud mining site like Genesis or Hashing24. Call it cloud if it suits you (or maybe calling it "vapour mining" to differentiate from the other usual cloud mining sites), but members who buy the Founder Pool own their own hardware which they can reclaim at any time. To my knowledge, no one has ever done that in the 3 years since BCN started mining as it would be quite silly to do so, because no one has lost money mining with BCN since its inception in August 2014. As far as I know.
2. My site didn't mention or explain anything about margins, that's because the btc per year figures quoted are net earnings to the members, after all the overheads have been deducted. In the screenshot of my earnings which you have attached in your post, you can see that my total earnings to-date is about 0.98 btc (earned), and the net is about 0.57 btc (paid). The difference in between is the amount deducted for the overheads you're concerned about like electricity, maintenance, commissions, site staff salary (we have about 6 or 7 technicians on payroll if I am not mistaken), but above all else, INCLUDING...
3. ...repurchases set aside for future hardware upgrades. As I have mentioned in one of my earlier posts, since BCN started mining, they have upgraded from the AntMiner S3 to the S4, S5, S7 and currently S9, all without further capital reinjection from members. This arrangement is made possible because of the repurchases set aside. We always foresee the need to upgrade when the time comes, and it is compulsory for all members to set aside part of their earnings for this. No exemptions are made, because if some do and some don't, the whole pool will cease to be profitable prematurely. We personally know of individual miners who sneered at our programme and preferred mining on their own, only to come back months later and mine with us. The power of the repurchases and compulsory upgrades cannot be downplayed, and it is what makes BCN sustainable and one of the top mining pools today. To elaborate a little, our mining hardware is immediately upgraded the moment the existing one becomes obsolete, which are quickly sold off on the second hand market while they still hold some value to recoup some of the costs. We have an arrangement with the manufacturer where we are offered the first right of refusal for all hardware manufactured, before they are sold to the open market. Our hashrates are also guaranteed by the manufacturer themselves, who deploy their own staff to assist with the management of the pool. Our minimum hashrates are guaranteed, and any downtime or malfunction is handled by the manufacturer with their own resources to maintain that minimum hashrate. Also, it is these repurchases set aside that allow partial shares to be bought and accumulated over time, effectively keeping the "contract" perpetual even after the expiry of the first 1,000 days.
Some 200 of our members from around the world made a trip to Iceland to visit the mine a few weeks ago, and were given some of the older unsold AntMiner S5 miners to take home as souvenir.
Some of the discussion above may be found at:
http://www.coinpurveyor.com/benefits-of-joining-bitclub-network/ and
http://www.coinpurveyor.com/faq-bitcoin-mining-bcn/
Mining is muddled to comprehend as for holding. Holding is straight benefit as following 2-3 months bitcoin cost is clearly going to ascend to a point that you will get attractive benefit from it. Be that as it may, mining regularly is spoken to by organizations as a simple method for profiting which it is yet just if appropriately finished with some keen counts or else you may wind up losing your venture and you won't know how. I see your point and have made some adjustments to my table to simulate a more realistic projection following a gradual drop in mining earnings with increasing mining difficulty over time. Thanks for highlighting it! I will entertain the idea and assume we have no plans of building bigger hashrates over time (even though we have plans to be Top 5 by next year), and other smaller miners don't fall off and quit from mining due to the increase in mining difficulty in the years that follow.
If this is still not "reliable" (which I think is a pointless term to use in this sort of comparison since all figures are speculative at best), by all means just use a lower figure of your choice, or just buy-hold and don't mine at all. Just remember that for the buy-hold column on the left, the later you buy and hold, the higher the price of bitcoin will be, and if someone were to buy bitcoin at the end of this year if or when 1 btc = $4,000 or $5,000, it would be less than 1 btc on the left column, but the mining column on the right remains the same.
You can view the revised table at the same page at http://www.coinpurveyor.com/buy-hold-vs-mining-bitcoin/.
I have retained the same conservative estimate of 1 btc = $50,000 by 2024, instead of $500,000 or $1 million as some people would like to think. Again, feel free to use higher numbers here that seem more probable to you, but you will notice that just using 1 btc = $100,000 in 2024 now brings us back to the earlier end figures in my original table with constant returns yearly (which is why I think "reliable" is a pointless term and why my tables were just supposed to show the advantages and merits of mining over buy-hold and not how much dollars you can potentially make).
Now, let's go through your concerns one by one:
1. Our so-called "cloud" mining site allows members to opt out from the programme and reclaim their mining hardware by writing in officially. The individually-numbered mining hardware will then be unplugged and delivered to the member. You can't do this with a real cloud mining site like Genesis or Hashing24. Call it cloud if it suits you (or maybe calling it "vapour mining" to differentiate from the other usual cloud mining sites), but members who buy the Founder Pool own their own hardware which they can reclaim at any time. To my knowledge, no one has ever done that in the 3 years since BCN started mining as it would be quite silly to do so, because no one has lost money mining with BCN since its inception in August 2014. As far as I know.
2. My site didn't mention or explain anything about margins, that's because the btc per year figures quoted are net earnings to the members, after all the overheads have been deducted. In the screenshot of my earnings which you have attached in your post, you can see that my total earnings to-date is about 0.98 btc (earned), and the net is about 0.57 btc (paid). The difference in between is the amount deducted for the overheads you're concerned about like electricity, maintenance, commissions, site staff salary (we have about 6 or 7 technicians on payroll if I am not mistaken), but above all else, INCLUDING...
3. ...repurchases set aside for future hardware upgrades. As I have mentioned in one of my earlier posts, since BCN started mining, they have upgraded from the AntMiner S3 to the S4, S5, S7 and currently S9, all without further capital reinjection from members. This arrangement is made possible because of the repurchases set aside. We always foresee the need to upgrade when the time comes, and it is compulsory for all members to set aside part of their earnings for this. No exemptions are made, because if some do and some don't, the whole pool will cease to be profitable prematurely. We personally know of individual miners who sneered at our programme and preferred mining on their own, only to come back months later and mine with us. The power of the repurchases and compulsory upgrades cannot be downplayed, and it is what makes BCN sustainable and one of the top mining pools today. To elaborate a little, our mining hardware is immediately upgraded the moment the existing one becomes obsolete, which are quickly sold off on the second hand market while they still hold some value to recoup some of the costs. We have an arrangement with the manufacturer where we are offered the first right of refusal for all hardware manufactured, before they are sold to the open market. Our hashrates are also guaranteed by the manufacturer themselves, who deploy their own staff to assist with the management of the pool. Our minimum hashrates are guaranteed, and any downtime or malfunction is handled by the manufacturer with their own resources to maintain that minimum hashrate. Also, it is these repurchases set aside that allow partial shares to be bought and accumulated over time, effectively keeping the "contract" perpetual even after the expiry of the first 1,000 days.
Some 200 of our members from around the world made a trip to Iceland to visit the mine a few weeks ago, and were given some of the older unsold AntMiner S5 miners to take home as souvenir.
Some of the discussion above may be found at:
http://www.coinpurveyor.com/benefits-of-joining-bitclub-network/ and
http://www.coinpurveyor.com/faq-bitcoin-mining-bcn/
I don't think you will ever find such a study but it is not too hard to figure out, mining generates bitcoin whereas holding simply grows the value of your bitcoin, therefore if you mine and hold you will always generate more than if you just hold.
Not if mining costs more bitcoins than it generates.
IMHO, I believe that it depends on your personality, technical aptitude, and other environmental factors.
- personality: if you don't want to spend any efforts and prefer not to get your hands dirty, then buy and hold is better.
- technical aptitude: if you are not good with a computer, and not very good at innovation, then mining is not for you.
- environmental factors: access to cheap electricity, cold environment where you live, able to import equipment directly from Bitmain, access to reasonable price GPUs, and etc, then mining is for you.
The more efforts that you put into mining, there are more opportunities to maximize your profits with mining.
I constantly hear people arguing for mining as opposed to buying and holding or vice versa as better investment strategy - is there any reliable source of information that compares the two over an extended period of time?
I think Bitcoin mining and holding/buying will both earn almost the same profit in the end but have different pacing and initial investments. I haven't came across any article comparing the too but based on the factors to start either of the two I think I would prefer to buying/holding than mining because it is costly to start and maintain itself.
I don't think you will ever find such a study but it is not too hard to figure out, mining generates bitcoin whereas holding simply grows the value of your bitcoin, therefore if you mine and hold you will always generate more than if you just hold.
Not if mining costs more bitcoins than it generates.
Buying and holding is more profitable and advisable than mining. nowadays mining rig is so expensive so much better if you buy a coins instead of generating bitcoin since the price of GPU's today is so expensive because it is in demand today. and Mining is not profitable if you only have one mining rig you must have a lot of mining rig and also low cost electricity.
I don't think you will ever find such a study but it is not too hard to figure out, mining generates bitcoin whereas holding simply grows the value of your bitcoin, therefore if you mine and hold you will always generate more than if you just hold.
Well if you read the OP, the comparison to be made is mining vs buying and holding not simply buying one time.
Mining? Yes, when the price fell for nearly a year from late 2013 to late 2014 it might have been an option but it's no longer a good idea when the price of Bitcoin quadruples in 6 months time. It's much better to buy and hold in the current situation. Sorry I don't have time to post all the maths.
now a days bitcoin mining is less profitable because difficulty will increase with increase in price,
buying and holding will be the best option for us, because i see so many people get profit from bitcoin trading.
TBH mining needs maintenance expenses and electricity expenses also. but in holding we won't have to worry about other expenses instead internet expense.
buying and holding will be the best option for us, because i see so many people get profit from bitcoin trading.
TBH mining needs maintenance expenses and electricity expenses also. but in holding we won't have to worry about other expenses instead internet expense.
I don't think you will ever find such a study but it is not too hard to figure out, mining generates bitcoin whereas holding simply grows the value of your bitcoin, therefore if you mine and hold you will always generate more than if you just hold.
I constantly hear people arguing for mining as opposed to buying and holding or vice versa as better investment strategy - is there any reliable source of information that compares the two over an extended period of time?
Assuming you have a situation where you can mine bitcoins profitably, then mining may give you a better return than simply buying them. On the other hand, mining is much more risky.
To determine mining returns in the past, you can use past equipment and electricity costs to determine mining costs, and compare those to mining income determined from historical difficulty data.
I would agree that mining can be promising; however, the operative statement is "if it's still profitable." Many long time miners have tried their hands in trading because the saturation of mine-able coins has decreased greatly, not to mention that the capital you need like electricity, good PC specs, etc. are just as expensive before you can formally mine. On the other hand, trading may be a good way to boost your profit, if you have lots of extra coins to invest. It also has its risks. It actually depends on your gut and your experience.
I would say it's all about preferences and strategy, it's a solid fact that you would be more profitable if you already start mining early and where ROI had been already break-even, rest are just mere profits which is very stable compare to trading - buying/holding counts in this case. Investment on the other hand could generate higher profits in short amount of time if the trend is spotted early or you dipped at the best position.
Comparison? Do a google and you could see everything, but more mining you could visit cryptocompare.com and calculate accordingly, as for charts it's available everywhere and what i can say pros and cons are very subjective to different person. Mining - less risks, long term, guaranteed ROI over a certain period while investing is the opposite if you engage high risks alts trading.
Comparison? Do a google and you could see everything, but more mining you could visit cryptocompare.com and calculate accordingly, as for charts it's available everywhere and what i can say pros and cons are very subjective to different person. Mining - less risks, long term, guaranteed ROI over a certain period while investing is the opposite if you engage high risks alts trading.
I see mining to be more practical during the early years of bitcoin since we can get bitcoin for the same cost as our electricity and maintenance of cpus, however in the long run, bitcoin miners were developed and it did cost much more.since it needed much electricity and it needs to run for hours, however if you hodl during that time up until now, you'll see that it is worth it, but i do not suggest mining at this point, and just let the real miners do their job, since minig machines had developed through time and it is much harder to mine these days.at home, since you could only mine fewer bitcoins, well as for buying, it is practical before up until now, but with the value of bitcoin today, you need to know when to buy, and for holding, i still suggest to hold on to your bitcoins and wait until it reaches it peak value.
Well as compare to you I do the saving and for me the bitcoin saving is the best and the price worthy process. Because it is very important to save the bitcoin for the long time as if you will buy the bitcoin today and you will hold the bitcoin for the long time you will know the value of the bitcoin is increasing and you will be able to sell your bitcoin at the high price while you did not buy at the high price so it is the profit.I am still unsure of this, but I realize that mining can be more profitable if we can get ROi less than a year. so, once ROi is obtained, the next result becomes fixed income. Holding bitcoin is also profitable, but you will not know whether the price will continue to move like this year.
Would it have been better if I had held onto 10 BTC instead of holding half and putting the other half into mining? I don't know, and neither do you. This is my way of diversifying investments. The earnings from mining alone could surpass this if we continue to mine long enough in the future, and the people who get into mining are eyeing on this. It is a calculated risk with cryptocurrency investments at a different level, compared to buying and holding. Likewise, trading cryptocurrencies has its risks at another level. Maybe I didn't enter at a suitable time (close to the start of a new halving era and bitcoin price). As the price of bitcoin climbs to what it is today and a founder pool costs only 0.62 btc at today's rate, mining becomes a viable alternative for accumulation of bitcoin in the long term. But you would have to be part of a large sustainable pool with mining done correctly in the right conditions to have a chance to succeed at this, not mining on your own pointing to a known pool and bearing pool fees and electricity costs and other overheads at your own expense. There are synergistic advantages to being an inherent part of running your own pool, provided it is large enough. Just keep track of BCN's hashrate in the next few months, and if you don't take everything you see at face value and can see the underlying reasons, you will understand why the referral commissions matter. Without a referral incentive in place and without new members contributing hashrates, the crowdfunded setup that BCN is would have failed in its very first few months in 2014.
I see mining to be more practical during the early years of bitcoin since we can get bitcoin for the same cost as our electricity and maintenance of cpus, however in the long run, bitcoin miners were developed and it did cost much more.since it needed much electricity and it needs to run for hours, however if you hodl during that time up until now, you'll see that it is worth it, but i do not suggest mining at this point, and just let the real miners do their job, since minig machines had developed through time and it is much harder to mine these days.at home, since you could only mine fewer bitcoins, well as for buying, it is practical before up until now, but with the value of bitcoin today, you need to know when to buy, and for holding, i still suggest to hold on to your bitcoins and wait until it reaches it peak value.
Well as compare to you I do the saving and for me the bitcoin saving is the best and the price worthy process. Because it is very important to save the bitcoin for the long time as if you will buy the bitcoin today and you will hold the bitcoin for the long time you will know the value of the bitcoin is increasing and you will be able to sell your bitcoin at the high price while you did not buy at the high price so it is the profit. Jump to: