Topic: TO NEW MINERS: trust your feelings... - page 2. (Read 9265 times)

Well then....

Yeah, you 3 that have commented on this so far sure are smart...

She's actually pretty awesome, I've known both of them since college and they're quite a good couple. Apparently she was reluctant to agree to using their savings and suggested a number of smarter alternatives (selling one of their cars that they rarely drive was one of them), but he is so involved in this idea with BTC signs in his eyes that he worked into her for days until she capitulated. Now that she gave in she's starting to talk about the potential rewards too, excitedly (some kind of odd form of Stolkholm's syndrome? or sunk cost fallacy?).

It's my estimation that when he looses their wedding nest egg on this idiotic idea of mining on the idea that "at the worst" he could just break even and sell the hardware, and in fact takes a loss and sells the HW at a fraction of his costs, that she'll likely be so devastated at being taken advantage of (and basically having been fucked out of their amazing honeymoon she wanted and a number of other post-marriage plans they had...Europe, for one) that she will leave him in disgust.

She's a sweet girl that was sucked into a fools dream, and I hope she bails on him, because I warned him too and he's just dead set on this bullshit.

So I guess to sum up what I'm saying is go fuck yourselves.  Yep, that's pretty much it really.  Go fuck yourselves, you know nothings.

Good day, Sirs.  Good day.

+1 LOL!!!

Well, just look at the charts. Every price/difficulty spike there would be miners influx, that's it

all I got from this is that your buddy needs to ditch his GF regardless because she's just into him because of the $...

gotcha...

Canada computers is getting cleaned out too, tons of 5830's when I got my Sapphire for $99 a few days ago and now there is one across the whole chain.

NCIX has a few left in stock, and if you're Canadian you can price match them with canadacomputers down to $99 each.

I'd like to address you instead of being general because you offer a wide target with this post. A few things pop out at me about you:

You exhibit a large speculative bias without basis. This is your largest fallacy by far because you assume there's these nebulous rich folk and bullish big business interests just ready to swoop in and inject BTC with their throbbing, well funded members. Well I ask you, friend:

On what ephemeral basis would they want to do that?

Oh, let me guess, you'll tow the BTC party-line mantra of what a superior conceptual currency it is, and how cryptomantic incantations and all that electronic sorcery goodness will save us from the ailing USD or whatever.

Fact is, friend, that rich folk and big business speculate on ECONOMIC DEMAND, and in the interesting case of BTC, there is no economic demand forthcoming.  See my mental exercise of getting your parents involved a few posts back.

Trust me brother, there's no rick folk with any modicum of business savvy and certainly no board of directors that are going to invest in a bunch of anarcho-libertarians and tech-nuts latest new-fangled financial obsession. Period.

Well to do investors and businesses will only fall in when individuals aged 25-50 can use bitcoin as easily and without thought as plastic.

Be honest chodpaba, and anyone else reading.  How long did it take you to mentally grasp bitcoin, and more importantly, how LONG and with how much EFFORT did it take you to actually GET ANY bitcoins by mining or market purchase?

If you're honest, the answer will fall neatly under the umbrella statement "A lot fucking more effort than a credit card!"

And it will always be thus, that is the NATURE of bitcoin.

Lol, or AMD...

maybe just better investing in the power companies

Will

I specifically mean those who have already dropped multiple thousands of $'s on multiple Ghash/s rig sets who have already completely paid off their iron on the recent price spikes.  They've already recouped their costs, have massive ghash/s online, and can just coast through whatever profits they can muster until their Ghash/J becomes negative.

And as I addressed in the post prior to this one,  many of these guys are not only in it for the short term gains, but the speculative long term gains (user Vladimir being a prime example) and will likely continue to mine long after their Ghash/J is negative, simple on future speculation alone.

Meaning, massive and unsustainable difficulty vs. profitability is here to stay in a big way and guys trying to get in now with big iron (or even around 1 Ghash/sec unless they got 4x or more of the 5830's for $109) and ever break even are playing a losing game, and I see no possible rebut to this fact.

But again, I welcome  a surprise.

Congrats on getting over the break even hump, especially with such a nice rig(s)!

You're a perfect example of the kind of person I'm talking about though that has already paid for their rigs, that will never leave the mining network until you're incurring a negative cost. For you it might be sooner than other because of your electricity cost.

However another interesting thing to realize is that there are MANY miners who even AFTER beginning to incur a negative cost, will STILL continue to mine because they're speculating on the price of BTC/$ in the future.

All things considered, especially with the massive influx of miners recently (including myself) and ever more coming every day (so many!), everyone's difficulty calculations are likely highly under-estimated.

The invested miners mantra of "price will follow difficulty" is just not going to hold through this phase in the life of bitcoin. That part of bitcoin's "puberty" is over. We've reached or in the next few days will reach critical mass where the difficulty over the next two periods will make new hardware impossible to even break even on.

I'd LOVE to hear a well reasoned rebut, especially a logical well thought out explanation why price will continue to follow difficulty, but I fear anyone up to the challenge will simply have nothing to fill the gap of fact that there's no real economy supporting the insane speculation, and no foreseeable economic bulk forthcoming to justify their arguments.

But I'm willing to be surprised!  Please surprise me!

Could you (or someone else) elaborate on how investing HEAVILY in mining makes it more profitable? Unless you're talking about custom-designed chips (asics), I just can't see how mining gets more profitable or less risky by sinking more cash into it. Are you talking about electricity discounts..?

While casual miners with 1-2 cards can probably find other uses for their hardware (gaming), I have a hard time imagining what I'd do with several computers packed with 5850's once mining turns unprofitable. Basically; I think what you're saying sounds completely backwards, please enlighten me.

You need to look at both Mhash/$ and Mhash/J. Once your rig has paid for itself your running cost is primarily determined by the price of electricity and Mhash/J  (assuming you are not paying additional datacenter colocation costs).

I did run the numbers for my own setup and assuming the conservative $10/BTC  exchange rate I have at least 2 difficulty increases to go through before I need to worry about rechecking the numbers. Electricity is expensive where I live ($0.20 kW/h) and I pay $18 a day to generate  5 Ghash/s. Note that my rig has already paid for itself so this is my only cost (excluding capital depcreciation).

I am not completey convinced that it would be too late for new miners to start today, though I can see the end for me possibly a few months away. Still, I would probably keep "donating" 500 Mhash/s to support the network as long as it remains viable.

I would tend to agree with you but it appears all the worthwhile 5xxx are sold out!  And, unfortunately the worthwhile 6xxx are just such poor mhash/$ performers, that I can't recommend even picking up a couple cards here or there, UNLESS you're definitely going to game with them as well.

Always be overly wary about the difficulty, that's what's going to kill you.

Oh, and that $30/BTC is a pipe dream if you're just hitting the pavement...

I'd stay away from buying an Uber-rig now, it's too late to make a fortune. Nothing wrong with picking up a couple 58xxs now though, especially if you game and can still use them if mining does become unprofitable.

Thank you all for the great responses!

There've been too many while I was away to respond to directly, but I'll try to generalize.

First I do want to clarify that all of you that are getting into mining with minimal investment, or with hardware you were planning to get anyway, or with existing hardware you had, MORE POWER TO YOU.  This thread was not started to warn you though, but warn the entrepreneurial spirited ones who are considering, or have already dumped a significant percentage of their savings or credit towards building a rig or rig sets.

Also, I'd like to draw attention to these same "by-product miners" in response to a number of people talking about difficulty increases. It seems to be the prevailing wisdom that when the price falls people will start bailing out on mining. You're certainly correct, but not in as general a way as you'd like to believe.  The only people mining that are going to bail when the price drops are the small time miners who begin incurring a negative cost, and the squeamish big iron; the ones that are going to be cutting their losses by selling off their hardware.  

However, "by-product" miners and the really big iron will still have ZERO incentive to pull out, and if you look at the bulk of the bitcoin network demographics, the ones that will bail at a price drop are not proportional enough to bring down the difficulty a significant degree.

This is simply layman's logic believing everyone will bail on low prices and make it easier for the remainder to be profitable again.  

THE FACT IS, that EVERYONE with a modicum of bullish belief in bitcoin will just keep slogging it out even to price/performance PARITY.  There's just absolutely no reason to pull out until you're incurring negative costs, and again, THE FACT IS, that there is already so much paid off iron at this point that the people who bail will amount to an insignificant portion of the entire bitcoin network's Ghash/s.

You all seem to think that you're more clever than your average miner and if you stay in it, the ones that leave will make you profitable again, BUT THEY'RE THINKING THE SAME THING TOO because it's the most obvious assumption to make!

And again, there's just not going to be as many people incurring a negative cost all at once to affect difficulty in any relatively short time frame to just all of a sudden make mining well profitable again.

<------------------------Chapter 2------------------------->

So that leads me to price.  I have seen so much foolishness from armchair economists on why bitcoin is going sky high.

I'm not an Ivory Tower economist be any stretch myself, but I'm also not emboldened by speculative biases, and do have a personal education in real markets to draw on.

At this point, the only thing propping up this price is speculators.  There is no real bitcoin economy yet.  There is nothing tangible to prop up the current prices.  There is no perceived value except by the very people gambling on it's success.

THE FACT IS, that the only factor that matters in bitcoin's real value is the lay person, and the issue with this is that bitcoin by it's very nature it's technical and complicated to understand (for your common man). Sure, you can market it in various layperson friendly ways like "paypal without the fees" as a basic example, but guess what guys: That's bullshit, and we all know it.

I'm a programmer of 2 years and a web-designer before that, have always been into computers and very technically oriented. It took me two solid days of research before I felt I understood bitcoin, and there are still deep unanswered reservations that only time will produce answers for.

The REAL value of bitcoin based on real and tangible economic activity at this point, based on my reflections on real economies and exchanges, is likely lower than $10/coin, but I will be generous in that respect because the ones that DO use it do in fact see an inherent advantage which lends value.

But do yourself a favor in trying to justify even a $30/BTC, by doing this simple exercise: Try explaining bitcoin and why they should start using it to your parents. Then, after they've paid you the courtesy of entertaining your spiel and maybe even agreeing that it's a great idea and propping up your confidence, try to get them to buy some bitcoins.  

NOT buy bitcoins with your help.  NOT buy bitcoins after giving them links to instructions on how to get started.  ONLY by asking them to buy bitcoins completely on their own, without any help other than being made aware of them, and then start using them to buy things.

Hey, get the fucking point yet?  They won't.  They NEVER WILL.  Unless you have rather extraordinary parents who are undoubtedly in a small minority.

If however you can get the most mundane of parents to go ahead with diving into bitcoin, LET US KNOW, cause then we can DEFINITELY assume a $30 bitcoin is a good bet based on future economic activity.

Thank you for your time, and I look forward to your responses, rebuts, and/or agreements.

May the wise have ears,

~ Synaptic


EDITS: Spelling/grammar/formatting

Don't kid yourself.  The difficulty isn't going to drop.  It may have in the past and it may again in the future, but only after either A) the government starts shutting down exchanges or B)It becomes unprofitable for all but a select few to mine.  The only people who it will be profitable for are those who have invested HEAVILY and have several Ghash/s setups or greater.  The casual miners who bought maybe 1 or 2 cards will take what they can and then sell off the cards when it no longer makes sense to mine.

My bad, I assumed it wasn't possible to go down.

exactly my point.

and whoever was pointing out. +90% and a 90+% jump are really the same thing here. @$10 with those difficulty adjustments. It just ain't possible. Unless a few people threw out all their life savings and matched 90% of the network speed a few before the adjustments and caused like everyone to give up or something.

Who the hell would do that if the coins are at $10. it's just not realistic. I do think you should down the down and up the up when doing budgeting but this is over doing it.