To mine or to buy? [Split from: Review of the SP10 „Dawson“ 1.4TH/s miner]

Entropy-uc

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Activity: 756

Merit: 501

Quote from: philipma1957 on April 23, 2014, 07:07:01 PM

yes but you are both ignoring USA tax law:

buying coins and holding is capital gain passive investment income.
buying a miner is self employment income it is active.

so for USA investing in coin vs mining with coin involves different tax laws.

I realize neither one will earn fiat money if btc drops in fiat price.

But if btc rises in fiat price both will profit and if you are USA based you will have different tax laws to follow.

US tax law makes it extremely undesirable to reinvest BTC into mining hardware. If you buy gear with BTC you need to pay the short term capital gains on your BTC. That is an extra 20-45% that your mining hardware has to earn before you have a profit on the purchase. Plus you can only depreciate the hardware cost over 5-7 years, so most of the earning from the new equipment will be taxed as ordinary income.

Since pricing of hardware barely supports break even as it is - a US miner reinvesting BTC is literally throwing BTC away by purchasing today.

RoadStress

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Activity: 1904

Merit: 1007

Quote from: xstr8guy on April 23, 2014, 06:55:17 PM

Quote from: Minor Miner on April 23, 2014, 06:20:14 PM

Quote from: xstr8guy on April 23, 2014, 06:08:47 PM

Quote from: Minor Miner on April 23, 2014, 05:50:45 PM

Quote from: RoadStress on April 23, 2014, 03:40:07 PM

Quote from: Minor Miner on April 23, 2014, 03:33:22 PM

I have another idea to cut the noise. For $4495, I just bought 9.35 BTC and did not have to wait until May to get the bitcoin and it made almost no noise producing them.
Or, you can give them $4495 now, and if the network only grows to 60PH/s by mid May (good luck with that), your noisy machine will start producing 0.08 bitcoin a day.
It will only take you around 6 months to get the 9.35 coins that you could have in an instant IF everything goes perfectly. Sound like a good deal?

Bitcoin goes to 1000$-2000$, you change them to fiat. After a few more months bitcoin goes to 5000$. You lose.

Your logic does not flow. Purchasing the coin NOW is more profitable than pre-ordering even if everything goes perfectly on your pre-order. Assuming what someone does at different prices (exchange rates) does not change that.

Yep, buying BTC coin at $490 is a great idea. That is until you panic-sell at $200.

Spurious. how does that affect an analysis on whether it is better to buy a machine that will produce bitcoin over a period in the future or buy bitcoin on an exchange right now?

I wasn't comparing mining vs speculating. I was simply stating that speculating is not without risk either. I lost my ass with my brief experiment with trading but I've made a positive ROI with mining. What works for one person might not work for another. I'm not built for trading. Mining might not be as lucrative but it's a whole helluva lot more fun... for me.

This! +1 I'm find myself in the same position. That's why i love mining and my heart loves me for doing it.

philipma1957

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Activity: 4116

Merit: 7849

'The right to privacy matters'

yes but you are both ignoring USA tax law:

buying coins and holding is capital gain passive investment income.
buying a miner is self employment income it is active.

so for USA investing in coin vs mining with coin involves different tax laws.

I realize neither one will earn fiat money if btc drops in fiat price.

But if btc rises in fiat price both will profit and if you are USA based you will have different tax laws to follow.

xstr8guy

hero member

Activity: 784

Merit: 1004

Glow Stick Dance!

Quote from: Minor Miner on April 23, 2014, 06:20:14 PM

Quote from: xstr8guy on April 23, 2014, 06:08:47 PM

Quote from: Minor Miner on April 23, 2014, 05:50:45 PM

Quote from: RoadStress on April 23, 2014, 03:40:07 PM

Quote from: Minor Miner on April 23, 2014, 03:33:22 PM

I have another idea to cut the noise. For $4495, I just bought 9.35 BTC and did not have to wait until May to get the bitcoin and it made almost no noise producing them.
Or, you can give them $4495 now, and if the network only grows to 60PH/s by mid May (good luck with that), your noisy machine will start producing 0.08 bitcoin a day.
It will only take you around 6 months to get the 9.35 coins that you could have in an instant IF everything goes perfectly. Sound like a good deal?

Bitcoin goes to 1000$-2000$, you change them to fiat. After a few more months bitcoin goes to 5000$. You lose.

Your logic does not flow. Purchasing the coin NOW is more profitable than pre-ordering even if everything goes perfectly on your pre-order. Assuming what someone does at different prices (exchange rates) does not change that.

Yep, buying BTC coin at $490 is a great idea. That is until you panic-sell at $200.

Spurious. how does that affect an analysis on whether it is better to buy a machine that will produce bitcoin over a period in the future or buy bitcoin on an exchange right now?

I wasn't comparing mining vs speculating. I was simply stating that speculating is not without risk either. I lost my ass with my brief experiment with trading but I've made a positive ROI with mining. What works for one person might not work for another. I'm not built for trading. Mining might not be as lucrative but it's a whole helluva lot more fun... for me.

Minor Miner

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Activity: 2268

Merit: 1011

Be A Digital Miner

Quote from: xstr8guy on April 23, 2014, 06:08:47 PM

Quote from: Minor Miner on April 23, 2014, 05:50:45 PM

Quote from: RoadStress on April 23, 2014, 03:40:07 PM

Quote from: Minor Miner on April 23, 2014, 03:33:22 PM

I have another idea to cut the noise. For $4495, I just bought 9.35 BTC and did not have to wait until May to get the bitcoin and it made almost no noise producing them.
Or, you can give them $4495 now, and if the network only grows to 60PH/s by mid May (good luck with that), your noisy machine will start producing 0.08 bitcoin a day.
It will only take you around 6 months to get the 9.35 coins that you could have in an instant IF everything goes perfectly. Sound like a good deal?

Bitcoin goes to 1000$-2000$, you change them to fiat. After a few more months bitcoin goes to 5000$. You lose.

Your logic does not flow. Purchasing the coin NOW is more profitable than pre-ordering even if everything goes perfectly on your pre-order. Assuming what someone does at different prices (exchange rates) does not change that.

Yep, buying BTC coin at $490 is a great idea. That is until you panic-sell at $200.

Spurious. how does that affect an analysis on whether it is better to buy a machine that will produce bitcoin over a period in the future or buy bitcoin on an exchange right now?

xstr8guy

hero member

Activity: 784

Merit: 1004

Glow Stick Dance!

Quote from: Minor Miner on April 23, 2014, 05:50:45 PM

Quote from: RoadStress on April 23, 2014, 03:40:07 PM

Quote from: Minor Miner on April 23, 2014, 03:33:22 PM

I have another idea to cut the noise. For $4495, I just bought 9.35 BTC and did not have to wait until May to get the bitcoin and it made almost no noise producing them.
Or, you can give them $4495 now, and if the network only grows to 60PH/s by mid May (good luck with that), your noisy machine will start producing 0.08 bitcoin a day.
It will only take you around 6 months to get the 9.35 coins that you could have in an instant IF everything goes perfectly. Sound like a good deal?

Bitcoin goes to 1000$-2000$, you change them to fiat. After a few more months bitcoin goes to 5000$. You lose.

Your logic does not flow. Purchasing the coin NOW is more profitable than pre-ordering even if everything goes perfectly on your pre-order. Assuming what someone does at different prices (exchange rates) does not change that.

Yep, buying BTC coin at $490 is a great idea. That is until you panic-sell at $200.

Minor Miner

legendary

Activity: 2268

Merit: 1011

Be A Digital Miner

Quote from: RoadStress on April 23, 2014, 03:40:07 PM

Quote from: Minor Miner on April 23, 2014, 03:33:22 PM

I have another idea to cut the noise. For $4495, I just bought 9.35 BTC and did not have to wait until May to get the bitcoin and it made almost no noise producing them.
Or, you can give them $4495 now, and if the network only grows to 60PH/s by mid May (good luck with that), your noisy machine will start producing 0.08 bitcoin a day.
It will only take you around 6 months to get the 9.35 coins that you could have in an instant IF everything goes perfectly. Sound like a good deal?

Bitcoin goes to 1000$-2000$, you change them to fiat. After a few more months bitcoin goes to 5000$. You lose.

Your logic does not flow. Purchasing the coin NOW is more profitable than pre-ordering even if everything goes perfectly on your pre-order. Assuming what someone does at different prices (exchange rates) does not change that.

RoadStress

legendary

Activity: 1904

Merit: 1007

Quote from: Minor Miner on April 23, 2014, 03:33:22 PM

I have another idea to cut the noise. For $4495, I just bought 9.35 BTC and did not have to wait until May to get the bitcoin and it made almost no noise producing them.
Or, you can give them $4495 now, and if the network only grows to 60PH/s by mid May (good luck with that), your noisy machine will start producing 0.08 bitcoin a day.
It will only take you around 6 months to get the 9.35 coins that you could have in an instant IF everything goes perfectly. Sound like a good deal?

Bitcoin goes to 1000$-2000$, you change them to fiat. After a few more months bitcoin goes to 5000$. You lose.

Minor Miner

legendary

Activity: 2268

Merit: 1011

Be A Digital Miner

I have another idea to cut the noise. For $4495, I just bought 9.35 BTC and did not have to wait until May to get the bitcoin and it made almost no noise producing them.
Or, you can give them $4495 now, and if the network only grows to 60PH/s by mid May (good luck with that), your noisy machine will start producing 0.08 bitcoin a day.
It will only take you around 6 months to get the 9.35 coins that you could have in an instant IF everything goes perfectly. Sound like a good deal?

Topic: To mine or to buy? [Split from: Review of the SP10 „Dawson“ 1.4TH/s miner] (Read 756 times)