Topic: Reliable comparison between mining vs. buying and holding - page 2. (Read 4531 times)

There is none because most miners hide information regarding profitability of mining rig in reality because of lesser miners means more profit to them. When it comes to mining cryptocurrency the country, the area, the electricity, the hardware and a great coin to fork is the bigger issue. If you think you have that solved mining is better than buying bitcoin.

If we make a comparison in between mining and holding of bitcoins, then we’ll get to know that at the very present moment, it is buying and holding of bitcoins which is having more advantages than that of mining. Mining requires super computer along with huge consumption of power and electricity. You should go for playing a safe game. Buy your bitcoins and keep on holding them for as long as you can.

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.

Mining and Hodling both are totally different practices in my opinion.
Mining require both capital and patience, Miners need to invest a lot of money initially and it takes some time(around 7-8 months to recover the investment and get favourable Return). Also good technical knowledge is required and it also involve maintenance cost in long term.
On the other hand, you can buy or sell BTC at any point of time without any such problem. Not much technical knowledge is required.

End goal of possessing the bitcoin at cost effective way has two main ways to achieve. One is mining and other is purchase-hold. Lets look at the mining and its cost:
* price of miner being used. Based on the which type of miner you are using price will vary.
* Electricity charges applicable in you area or area of interest (The area where you will set up the miner rig)
* Price for place of operation. Either place would be on Rent  thus rent on monthly basis or trimonthly basis.
* AC and or miner place maintenance

profitability of mining based on above factors could calculated fairly accurate with coinwarz calculator. Check following link for the calculation:

https://www.coinwarz.com/cryptocurrency

From a laymans point of view mining is a lot of hassle. For ease of possessing coins purchasing and holding is fairly easy. Above requires in depth knowledge of mining or at least some understanding along with previous experience in mining will be helpful.

If person is technical or is willing to go to great length then mining will be profitable. Or you should focus on purchasing on the coins from market.

It isn't that hard to figure out. If you invested 5 BTC into BCN mining and you ended up with less than 5 BTC, then you have lost money.

You seem to feel that your support of the bitcoin network justifies that loss and I have no problem with that; however, there is a problem when the money losing aspect of BCN mining is hidden from people.

It's a good question obviously, but the answer will vary due to there are some factors to be considered for holders and miners such as:
- unpredictable bitcoin price in the future (even though it's more likely increases over time
- electricity costs for mining
- difficulty adjustments
- taxes
Mining isn't for layman without sufficient funds and skills obviously, it takes months and even years to get ROI.
That's why most people going into holders instead of miners.

I am agree with you because the mining needs the proper equipments to buy and those equipments are very expensive and it takes a lot of the time as well, on the other hand the buying and the saving of the bitcoin is the best option because a lot of the people are buying the bitcoin and they are saving it for the long time because the value and the price of the bitcoin is increasing more and more.

TBH i will preferably Buying and holding bitcoins, because now a days Mining need too much investment needed best hardware with highest Hash rate for eg. Antminer. Mining is also difficult because it needs electricity, proper maintenance of hardware that makes hardware too expensive.

if we compare mining with buying and holding than buying and holding is very easy, just bought and hold and sell when price will high.
but buying and holding is involved risk always.

I would say to do both. For example, if you had the funds to buy 5 btc, I would suggest to put 1.5 btc into mining with a pool like BCN (and the other 3.5 btc into holding) because even though they are not the elite, they build their hashrates from an ever expanding member base from around the world, and they have programmes in place to stay sustainable for some time to come. In about a year or so, the amount of bitcoin mined and paid out, at the price of bitcoin then, should be enough to recover the initial investment, and you can still continue to mine thereafter and earn more than the original 1.5 btc you invested. This was the experience of all members who have been mining for at least one year with BCN in the past three years. Whether they will still be profitable in the next one year from now as they have been in the past, no one can say for sure, but they have mechanisms in place that looks promising enough that they will be mining for years to come.

BUT say, if you only had the funds to buy 1 btc, then you are right, it would make sense to just buy and hold.  

Mining won't already be profitable at this point of time. There's a lot of miners and mining company that put up their mining businesses (I am referring to mining rigs and units, not mining pool and sites) and that will result to a fast increase in total number of available bitcoins and mined bitcoins. As of now, there are already almost 80% of all available bitcoins being mined. After all 21M bitcoins are mined, miners will just earn from transaction fees of every transactions made by bitcoin users. You should also consider that setting up a bitcoin mining sets requires a lot of time and effort, and it will also need electricity which will result to high electricity bill.

For me, buying and holding will be better since bitcoin price is continuously increasing since 2013, and is predicted to double in the next coming years. Also, there are a lot of good altcoins out there that you can buy and hold. Instead of dividing your money to use some of it in buying bitcoin mining machines/rigs/gpus/sets, I'd rather use a part of my money in buying other altcoins and the other part in buying bitcoin.

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/

          As far as i am concerned, if you have that resources that you can go ajd make a mining rigs then its up to the person and if at the same time he is also trading or something else like that, would it be bad also? It is not about comparing which is better just for the sake of other peoples opinion, when they can even do both as long as they can keep up and earn from their resources.

xhomerx10,

I saw that link you posted as well as some other negative reviews about BCN before I joined them and upon doing my research for about a week, I came to the conclusion that nothing in those articles were true. This was also confirmed once I was in BCN after a few months and knew in greater detail how they operated. BCN used to point their hash powers to a well-known cloud mining company in the earlier days but since becoming large enough, they now run and managed their own pools with hardware belonging to members. There are also some claims about BCN being a ponzi, which is not true. Only members know better. But you didn't say BCN is a ponzi, so I am going to let it slide.

A list of well-known cloud mining companies may be found on this list: https://bitcoinworldwide.com/mining/cloud-mining/

On my table of comparisons, I have stated that "mining difficulties change with time, and some variations and range can be expected throughout its course". When we started in January this year and BTC hits its ATH of $1,300, the daily figures fell slightly. When China announced their capital controls shortly after that, we saw as much as twice the number of bitcoin mined each day, although it resumed back to its usual average in the weeks that follow.

We know that mining difficulty is constantly increasing, that is a given - but that doesn't mean some miners won't fall out of the race along the way and allow the larger miners a higher portion of the bitcoin released into circulation. We went from obscurity to currently at Top 10 to 15 and have been for over a year now, and hope to achieve Top 3 to 5 by next year. Only time can tell if we will make it. No ROIs are guaranteed and my article made it clear about that. It also stated that you may "feel free to use your own projection in the calculation". The article is also meant to illustrate that when you buy and hold a bitcoin, you never really know when you are going to sell. But when you do, when you feel that the price is right, you no longer hold any bitcoin for future capital appreciation. Compared to mining, whenever you choose to sell your holdings for whatever reason, you will still continue to receive your proceeds from mining, assuming the mining operation is still profitable and sustainable then. If you don't like my figure of 1.2 btc, then just replace it with something lower, like 0.6 or 0.8. Mining does have its advantages, but it does carry some risks as well. And we all know what those risks are...come on, we're talking about cryptocurrencies here. If you want safe, put your money in the bank and just earn 3% interest p.a.

Still, I would recommend that people do both buying and holding, and mining, as I concluded in that article.

Mining cryptocurrency is having a physical asset that will give you a chance to earn different kinds of coins that is mine-able by your hardware and you can choose whichever coin you want to mine while in the buying and holding part is you only relying to what will market reacts to a positive or negative side of it. both of this kind of things is worth it if you invest not only your money but your time in learning the different kinds of techniques so that you will not end up broke.

But mining is problematic. You won't mine forever or until 2146 with the same mining equipment, the difficult is constantly increasing, also there are extra costs if you are mining physically, on the cloud it becomes worse as the ROI takes too much time to happen or it may never happen.

Let's say with $5000 I buy 1 Bitcoin. But with the same $5000 investment in mining I'm not able to get 1 Bitcoin from it.

Mining has got lot many requirements and different governments have provided with different stepped process to make it efficient. With buying and holding, all that required is the patience to hold. More the time iin the wallet more will be the profiting.