Bitcoin Forum

A bunch of harpies who are angry at reduced profits due to difficulty increases have taken it upon themselves to whine loudly on the forum about how mining is a bad investment.

These people invariably have their own mining rigs: they don't follow their own advice. They're trying to avoid further difficulty increases, which may make them lose money.

Mining is still very profitable, and if it wasn't, these assholes wouldn't be spending their free time trying to convince you not to do it.

In conclusion, if you think it would be fun to participate, go for it. Hopefully you know something about hardware, software, and trading. You'll probably make your money back no problem. It may take a few months. Bitcoins probably aren't going anywhere though.

Just remember: all of these people trying to convince you not to do it, are themselves not following their own advice. If they did follow their own advice, they would sell their bitcoin machines RIGHT NOW to other miners via craigslist.

I'm not selling my mining rigs, and they aren't either, because we all know that mining is profitable and fun and will most likely remain profitable.

Of course. Just look at how Namecoin mining continues to be more profitable than BTC mining after people started bragging about it on the forum.

Oh, wait...

Right, miners have realized that since mining is competitive, by bragging about it they ruin their own golden goose.

That's why there is now a concerted effort to discourage newbies from starting up. Newbies are threats to profit.

"What is an ad-hominem attack?"

Oh, wait. This isn't Jeopardy.

(For those who don't know, an ad-hominem attack is an attack on the PERSON rather than his argument -- usually because his argument is impregnable and can't be refuted.)

To put it more plainly: if you disagree with anything I posted (which is nothing more than FACTS and REALITY), please feel free to quote me, disagree with any/all points, etc.

For example, I never said mining was unprofitable. But I am certainly one of the "realists" or "voices of reason"  (you might call me a "wet blanket") on this forum.

I could call you names as well, but I refuse to sink to that level.

Matthew

Oh, and I think you must be pretty dense to not realize that EVERYONE KNOWS THAT IT'S IN MINERS' BEST INTEREST TO DISCOURAGE OTHERS. It's not like you're letting the cat out of the bag or anything.

"Oh no, the jig is up!"  ...Not hardly.

Everyone knows that anything negative spouted on this forum about mining is partly to defend our own future profitability. You think some people don't know that?

A reader needs to take everything on its own merit -- either it's true or it isn't. And yes, a person should read the pros AND THE CONS of something like bitcoin mining before jumping in head-first.  It's called getting a balanced view.

You think all the stuff I pointed out is just so much BS calculated to scare you away from mining? Go ahead and believe that at your own peril. I didn't post *anything* that isn't 100% true. Heck, half the time I post mathematical figures, which don't lie.

I think you buy bitcoins instead of mining, and this is why you try to convince others to mine instead of buying. That way more bitcoins are mined in a shorter amount of time, and you will have less competition when you buy bitcoins so you get them cheaper.

Mining is profitable in the long run. Most people who are wanting to get into mining seem to think that they'll be making money from day one, which is far from the truth, and that's why I warn people to look into mining and see if the have any uses for the hardware if mining doesn't work out.

Also, a lot of people come in wanting to make cpu miners, which are fair to say very inefficient since the electricity cost to run dedicated cpu miners is more than the fractions of bitcoins that they might generate.


I agree 100%. For computer nerds like me, making mining rigs is run and I'll have a use for the hardware beyond bitcoin mining.

I call this thread a propaganda by the OP to raise difficulty in an attempt to raise the value of his bitcoin investment. Why else would anyone bother writing things like this unless they had something to gain.

Everyone already knows that you don't recover you investment at this point and investing will return better yields. You telling them to mine instead has got to be for one reason and one reason only. To try to get lazy people who won't do their own calculation to mine away while you put your money to buy bitcoins instead. If they bought instead of mining they would make more also, but it won't help raise the price of btc for you.

GO AWAY YOU PROPAGAIDIST YOU!

Most of the time, people talk their book.

Can't we just have big sticky saying "Buying mining hardware is risky, buying BTC is risky, You don't like risks go somewhere else"  So we don't have to read these posts 15 times a day?  ;D

I'm still mining...enough said.

I'll stop mining if it becomes unprofitable.  We're not even close yet.

I'm paying $0.31/kwh(fk'n ca), I'll be shutting down at $6-7  or the next few difficulty increases, whichever kills profitability for me first.

Your calculations are stupid for the same reason that the same calculations were stupid back in may, and in april before that, and in march before that. They're the same calculations.

Profitability depends on one thing: price of bitcoins. Since you can't predict this, you can't predict profitability.

Mining is betting that the bitcoin price will stay above a certain threshold. Buying coins is betting that the bitcoin price will go up.

Each bet has different risk profiles and can be approached differently, but both of them are just bets on the price of bitcoins, same as they were back in may.

There is nothing inherantly less profitable about the current moment than there was back in May - in fact it is easy to argue that bitcoins are a smarter and safer bet now than they were then.

Since I'm a miner, telling the truth goes against my self-interest. But the reason I don't mind telling the truth is because I do this primarily as a hobby, for fun, and because I think bitcoins are cool and have a future. I also think the long-term health of bitcoins will be bolstered by more people invested in them, by more miners, more decentralization, more activity, more interest.

So if a newbie reads my post and goes and buys mining hardware I will lose a bit of money in the short-term because of that, but in the long-term I don't mind.

Also, I just generally am pissed off by all you douche bags with your fear mongering and discouragement. I don't like you lying assholes on a personal level - the way you say one thing and do something else.

People just seem to have such insane ROI expectations for mining that it is insane, just because you cant make your hardware costs back in a month doesn't mean there is no potential for profit in it anymore.

It is also betting that difficulty increases don't grow fast enough to destroy your profits.  Right now the difficulty doubles every 18 days, so your output halves every 18 days.  That is a big problem

Well, it doesn't matter because the network is growing at 4% per day no matter what is said in this forum.  To think we have the power to change that is quite a conceit.

Again, I'm not going to lower myself to calling names.

Where have I lied? No one has showed me a single "lie" that I have posted.

I'm just telling them to use their heads and be rational. That is all.

Nobody needs to "encourage" any newbie -- greed (which is part of human nature) does that role just fine. My "job" is to balance things, to help people think more clearly.

I am having the same problem in my mining thread.  One guy follows my threads around to tell me how I am a troll and liar, but won't refute the facts I have put out.

The fact remains that because the network is doubling every 18 days, your output halves every 18 days and you won't ever break even because of that.  The mining calculators don't take that into consideration.

The threshold I mentioned contains the difficulty information. But really the difficulty doesn't matter. All that matters is the price. If the difficulty mattered, then people would have stopped mining at 250k. Bitcoins were actually MORE profitable when the difficulty rose to 450k and then 550k, and LESS profitable at 250k. Why? Because all that matters is the price.

But thats not true. If you were really mining you would know that our output trends have denied all conventional trending and still continue to turn a profit.

secondly. As in my case, my miners mine so can have bitcoin to trade. So lets say that im running 1300mhs and i make 1.7 coins per day (relally low for that output, but proving a point) with that 1.7 over 7 days I will have close to 15 and a $2 move on that 3 times in that period would close to dubble my income. On an average week I see under 20btc mining ,and over 60 in profit in trading.

Stating facts isn't the bullshit part.

The bullshit part is when you tell people "you won't ever break even" when YOU DON'T KNOW THAT.

Did you tell those people that by your same calculations, mining would be considered unproftaible in may? In april? In march?

Because all these calculations are the exact same calculations done for the last year, and these calculations say very little, because the people who do these calculations (you!) cannot predct the single important factor that actually matters: price.

All ROI calculations are bogus because all ROI calculations make assumptions about price. Any conclusion other than "I don't know what's going to happen, your guess is as good as mine. Just depends where you think the price will go." is bullshit.

Thank you for stating what I should have said in the first place...I am the "guy following the troll". LOL
He is starting multiple threads with the same garbage...not one of his threads is a new argument...all of them are negative.  Spreading FUD

Sorry, I misspoke.  I should have said that mining isn't profitable at the current price, and is less profitable than investing in bitcoins directly with increasing prices.  The only thing I am predicting is that the network continues to grow at 4%/day, which it has on average over the last year.  Almost perfectly.

Check out http://bitcoin.sipa.be/  to see just how perfectly.  As long as that remains the same, you won't make as much money as just investing in bitcoins.

So yes, I would have said in April that mining is less profitable too.  If you had bought $1,000 in bitcoins you would have $20,000 in bitcoins now.  Did anyone buying $1000 worth of mining equipment make $20,000 in that same time period?

I think it's cool that you're trying to learn how to be an amateur investment advisor.

So here's a lesson: risk is the single most important variable in an investment.

Buying bitcoins is, by a fundamental law of the universe, always going to be more potentially profitable than mining because it is higher risk.

Mining is lower risk, but also lower expected returns.

An investor's choice of where they should put their money and time depends on their risk profile.

Is the investor looking for a high risk, high yield investment, and is comfortable taking losses but still acting rationally? He should buy bitcoins.

Is the investor running tighter on money and can't afford to lose much, but also isn't aiming to make more? Is the investor willing to invest personal time and effort managing his investment? If yes he should consider mining.

Variables that matter for deciding about an investment in bitcoins:
- Your risk profile
- Your beliefs about future price
- Your skills (Are you capable of trading wisely? Avoiding panic? Not getting scammed?)*
- Your interests (Does system administration turn you on?)**

Things that don't matter:
- Other people's calculations about difficulty increases
- Bogus ROI calculations based on unknowable assumptions
- Stuff your competition says to discourage you from competing with them


*Lots of people who attempt to become traders end up losing their shirts because they panic. The ideal trader is a person who is rational and level-headed even when others scream that the sky is falling. Not every personality type is a good trader: people with the letter "F" in their MBTI are often naturally bad traders for instance and tend to buy high and sell low despite their best intentions. If you have an "F" in your MBTI you should consider if you can handle the pressure of knowing you could lose all your money.

**Running a bitcoin machine is like buying a pet. It takes regular maintenance and a non-zero recurring time investment. It also requires a variety of computer skills that many miners take for granted, but which newbies may not have and may not have an interest in learning.

Sorry, I misspoke.  I should have said that mining isn't profitable at the current price, and is less profitable than investing in bitcoins directly with increasing prices.  The only thing I am predicting is that the network continues to grow at 4%/day, which it has on average over the last year.  Almost perfectly.

Check out http://bitcoin.sipa.be/  to see just how perfectly.  As long as that remains the same, you won't make as much money as just investing in bitcoins.

So yes, I would have said in April that mining is less profitable too.  If you had bought $1,000 in bitcoins you would have $20,000 in bitcoins now.  Did anyone buying $1000 worth of mining equipment make $20,000 in that same time period?

[/quote]

I think it's cool that you're trying to learn how to be an amateur investment advisor.

So here's a lesson: risk is the single most important variable in an investment.

Buying bitcoins is, by a fundamental law of the universe, always going to be more potentially profitable than mining because it is higher risk.

Mining is lower risk, but also lower expected returns.

An investor's choice of where they should put their money and time depends on their risk profile.

Is the investor looking for a high risk, high yield investment, and is comfortable taking losses but still acting rationally? He should buy bitcoins.

Is the investor running tighter on money and can't afford to lose much, but also isn't aiming to make more? Is the investor willing to invest personal time and effort managing his investment? If yes he should consider mining.

Variables that matter for deciding about an investment in bitcoins:
- Your risk profile
- Your beliefs about future price
- Your skills (Are you capable of trading wisely? Avoiding panic? Not getting scammed?)
- Your interests (Does system administration turn you on?)

Things that don't matter:
- Other people's calculations about difficulty increases
- Bogus ROI calculations based on unknowable assumptions
- Stuff your competition says to discourage you from competing with them
[/quote]
Difficulty increases aren't just an assumption, look at the graph of the last year.  What I am saying is that as long as difficulty increases are growing at the current rate, mining will never be as profitable as investing directly.  At the current rate, you have to have an increase in bitcoin value to compensate for the increase in difficulty to just break even.  So indirectly, you are speculating on the increasing value of bitcoins when you mine.

Now, if the growth of computing horsepower slows down to 2% or less, then mining obviously is the better option.  Like for the first year of bitcoin's existence when the growth was flat.

Mining is lower profit, but it's also lower risk. You can sell your rig, you can use it on other projects, or you could play games with it. Mining can also remain profitable even if the price goes down, especially if, as the price goes down, network growth rate decreases.

Your extrapolation of the difficulty growth is still just a guess. There is no reason why difficulty has to keep growing at that rate. It could easily fall to 2%.

In conclusion, mining makes as much sense now as it did on May 1st. Which is to say, it's anyone's guess what will happen.

You are absolutely correct that in the worst case, you still have hardware you can sell or use.  In the worst case of investing directly you have nothing.

As far as network growth, I wouldn't say it easily go down to 2%/day because it hasn't in the last year.  That being said, it will have to slow down at some point because there are only so many GPUs out there.  When that happens no one knows, but betting it will happen next week is a risky bet.  Of course, once someone makes some custom ASIC arrays the game is over for everyone.

This ^^^^

 ;D ;D ;D ;D ;D

If you're chicken enough to lose money, then don't even think about Bitcoin.

Chickens!

When it comes abstract mathematical metrics derived from the interaction of complex human behaviour, past performance does not predict future performance. This is economics 101.

Difficulty is not a physical object. It does not obey Newton's first law. Abstract, arbitrary metrics generally don't. (And when they look like they do, it's usually just because they haven't changed yet. See: LTCM. See: Housing prices. See: Tulips. When stuff looks predictable, it's usually because you're suffering from selection bias.)

It's nice to see a new 35 post count user that wasn't created just to post about the doom of bitcoin. I don't want to call him an anti-troll because it still seems to have created a lot of friction, but this is as close as it gets. I'm not a fan of the topic title, but my favorite part is what I've been trying to tell people


Yes. A million times yes. We obviously make our little personal models and try to fit them as well as we think we can so that they'll be useful, but who the crap knows what will happen. A huge solar flare might erupt sending an EMP down that surges the power grid, blowing up tens of thousands of mining rigs. Or a news report might come out on CNN saying "bitcoin is a way to make free money forever! Roll over to cnn.com/bitcoin_moniez to see how!"

Or something more reasonable in between those extremes. Bitcoin is small enough that external events can have a huge huge huge impact on it. For good or ill.

I don't think there will be any bitcoin doom.  I think it is the future.  And I think there is still a lot of money to be made with it.  If it becomes the world reserve currency, watch it go up another 10,000 times over.

My only small issue is dedicated mining rigs at the current network growth.  And right now, the numbers have been pretty consistent.

Nobody has mentioned yet the risk of the ASIC that different groups have announced for the end of this year begginning of the next one. When that hardware is ready your GPU wont be able to compete and will be an obsolte investment. And the prodcution is halving every 18 days because of the increase of difficulty. If you are not able to break even under those conditions by the end of the year, you should think very carefully what you are doing, otherwise you are going to loose money since you wont be able to keep your GPU generating (profitably).

There is only two things that can change to make mining profitable. 1) The difficulty stops growing so much giving miners some room to get more bitcoins. 2) The price rises consierably, to $30 and beyond.

(This part is speculation obviuosly) Regarding 2) I dont see that happening for a long time, probably until 2012 because the initial rush because of the press has happened and there is a lot of people looking to unload in the $20 range and beyond. It will take time and a lot of demand to break that resistance. Also, the kind of people the rush has attracted to Bitcoin is not people looking to improve the Bitcoin economy, but a lot of those are looking for a quick and easy way of making money, so when the price rises to those levels they will sell.

Regarding 1) is the part that I see more posible to change. I still dont understand how anyone can be buying dedicated miners at this point, so it makes sense to me that at some point not so much capacity will be added to the network and the difficulty will stop growing so much. I really dont understand some people that are buying and buying GPU's right now. What are they going to do with their 50+ gpu farms when the ASIC chips make their hardware obsolete? The second hand market wont be abel to absord so many gpu's going on sale all together. But again, its not guranateed that the difficulty will grow slower, for all we know it could grow even faster. But I think its more probable that we see the difficluty slowing than the price rising a lot in the rest of 2011.

But anyone has to keep in mind that if there is not a big change in the difficulty trend or in the price, buying a dedicated miner right now is NOT profitable, you wont break even. Anyone can do the math. Mining is not fine. We are in a very delicate moment.

ASIC's were mentioned in his nearly identical thread.

Not his thread...another one.

If growth slows down, mining will become profitable until ASIC time.  But that is a big "if".  So far it hasn't shown any signs of slowing down.

That is because everyone knows that ASICs are the inevitable end game.  Whoever has those wins.

Even a ASICs design will have a hard time vs a few million gamers worldwide who consider their graphics cards free and GPU shrinks that happen every 18-24 months on average. Any ASIC design brought out today will have to compete with the radeon 7xxx series and not current hardware.

The point of the ASIC's is lower consumption. How can a 7XXX compete with a device that consumes 10 times less energy for the same bitcoins? ASIC's will make GPU mining obsolete.

The problem is that an ASIC can be custom designed to go orders of magnitude faster than a GPU for a specific task.  As just a very rough estimate, one SHA256 engine with bitcoin hash difficulty detection would take something like 1 million transistors.  The latest ASIC technology allows 2 billion transistors.  So that would allow 2,000 of these engines per chip.  If you layed them out by hand, you could probably get them up to 4 GHz.  Assuming one hash per clock, this ends up being 8 TH/S per chip.  In other words, this one chip could outperform the entire current BitCoin network.  And once the multi-million up front tooling costs are covered, you can make each chip for $50 each.  So for another $10,000 you could make a system with 200 chips that would be able to dominate the entire network at 200 times its current capacity.  It would pay for itself in about 20 days, because you would get every bitcoin made in that period.

If the exchange rates hold, you could multiply your earnings and buy thousands more chips for a low incremental cost to maintain your dominance.  I don't see how GPUs could begin to compete with this.

By every coin you mean the 2 weeks you would have to pull this off before you set off the biggest difficulty increase ever seen?  Highly doubt you could mine fast enough to generate 1,500,000 worth of coins before the difficulty increase...

I have been trying to decide if its worth it to go big right now..

In 2 months the difficulty will most likely be in the 2 million range.  If coins don't increase by then, and you are someone who pays for power, you sir will most likely be priced out of the mining market. 

Currently if you pay .10 / kwh and your machine takes 5 amps of power ( i measured it with a power meter today dell with 1000 w power supply and 2 6970's) then your coins are cosing you ~$13.08 each to generate..  Thats not taking into account any 3% or 2.5% that your mining pool is taking.  Since coins are in the 15-20 range.. people are still making money.


Difficulty                    Electricity Cost per bitcoin
877226.66666667       $13.082351858737873   <----------current
1877226.66666667     $27.9956603066546       <--------- projected 1 or 2 months
2877226.66666667     $42.908968754571305   <---------- projected 3 or 4 months

If the market price of bitcoins does not exceed the power cost, then you sir are assed out...

There are a lot of people who don't pay for power and a lot who do. 

My prediction is there is going to be a huge run up, then an over correction down or a leveling out when only the people not paying for power are left in the game.

I would say if your in it for at least a year, then you might be ok, anything less and if your paying for power get ready for the blood bath that is about to happen.

it all sounds so good except that one or a group of people have to come up with millions of dollars to do this. And i have a feeling
2 million is just enough to go bankrupt trying without producing a single thing.

sure.. if you get lucky and manage to rope in a few experts in the area you have a greater chance of success.. and if they donate their
time for basically a shot at making bitcoins... and if several stars align just so... maybe someone will make a package that can do this.

i am not an expert in the field. i am known to be wrong and probably am. this is just a gut feeling that if people guess that it will take
1 million dollars to do the job.. i normally multiply that in my head by a factor of 5 to really make it happen.

edited to add:

10:31    TD   so it's $1000 per gigahash?
10:32    ArtForz   well, if support components, PCBs, cases, ... grow on trees, yes

----

but he wins on the power side of things for sure.

I'm still making $60 on average per day (with 1 BTC = $15), and at max my electricity usage for my rigs is $4 per day, therefore mining is very fine :)

to generate 4 btc / day you must be doing 4000 mh/s? 

That's 10x 6970's...

So your running 5 boxes for $4 a day?   

Can you tell us your rig and your Kwh rate?

Mining is profitable, right now, but will not be profitable for anyone if people mindlessly pile in with thousands of dollars in additional hardware without taking into account the regular 50% difficulty increases every 10 days or so.

There's also nothing like trying to bring people over to your side of thinking and convince them by calling them names.

Mining is profitable right now if you have the initial investment paid. But if you expect to get the initial investment back that is another issue.

These people invariably have their own mining rigs: they don't follow their own advice. They're trying to avoid further difficulty increases, which may make them lose money.

Ok if the miners are trying to avoid further difficulty increases which will make them loss... What stop the new miners that you say for them that minning is profit to losss??
You contradict yourself

You can mine and hoard all the bitcoins you like, they will be worthless unless the Bitcoin community gets more involved in setting up shops and businesses, most people are not interested in trading, they just want to know if they can buy a pair of shoes with bitcoin, and if they can't, or it's difficult with few options, they won't buy in.

0.34 pence per kwh :)

8x 5870 gfx cards (410 - 420 Mhash/s each) ... 600 watt PSU .... 50 pence per day per box, max

Mining NMC, not BTC

That was based on NMC = 0.06, but that has now changed

NMC price is dropping faster than a whore's knickers in brothel... currently 0.03 BTC per NMC

Now it is definitely more profitable to mine BTC...

Make way, I am coming back to the BTC miner's way...

i thought it would be fun to write a calculator for this. i know people have been trying to do it with excel spreadsheets, but honestly they suck and usually don't work with openoffice.

here's my calculator's result for mining in germany and within the US. it's funny. this example shows buying a 6950 at 200€
.
http://www.abload.de/img/lolamericansnna2.png


[edit] "in the minus" sounds very german. oh dear. i hate myself. and changed the picture. because 200 eur is not 200 usd.

Looks like Delphi!

how could you tell? :D no, it's the only thing i've learned in school. never felt the need to switch to something cooler.

According to rumors I have seen around the forums in the last few weeks, there is a group called LargeCoin that has managed to secure a couple of mil and the ASIC engineers to do just that.  If I were one of the original bitcoiners that just made 5 million in the last week, this project is exactly what I would be doing with half of the proceeds.

ArtForz used structured ASICs which are just one step above FPGAs.  They won't have nearly the performance of a full custom ASIC.

Delphi is my fave.  I have V10 now.  Unfortunately our company switched to C# two years ago.  Although C# is actually a more powerful language, its syntax isn't as nice as Delphi.

By the time these magical ASICs are designed, produced and put in use GPU mining will mostly be inefficient anyway unless the price per BTC increases by A LOT. It takes time to produce such a chip.
Buying equipment for mining NOW would be STUPID. It'd be safer, as an investment, to just buy some bitcoins on the market. However, if you're a miner and have some bitcoins, it would be prudent to urge more people to mine and acquire bitcoins for the sake of increasing the size of our economy despite the impact on your mining profitability in bitcoins.

I don't know if you realize this but people have been stating the exact same thing as you for over 6mos yet people have still managed to pay off their rigs...you can probably make more money buying stock in an electronics manufacturer as opposed to selling their item but it doesn't mean either way is better...they both have their pluses and minuses...just like mining/investing.

I would have made more investing for sure...doesn't mean mining was stupid...just different methods/risk/end goal.

I would really like to see the price of BTC continue to rise, like it has in the past 6 mo.  If it does, that will help the current adopters to pay off their rigs.

Really though, we seem to be running into a GPU limit.  1.0 Ghash (3 cards) puts out 1.0 BTC/day.  In the next difficulty that rig only puts out .6 BTC/day.  Then, 10 days later, will put out .4 BTC/day.  The amount of media attention and network growth is impressive.  The hardware is not keeping up.  By mid August we're going to have hit a wall in terms of producing BTC simply based on ever-increasing difficulty, and nothing being faster than the 6990.

There may be nothing as fast as the 6990 but you can certainly get rigs with a much better cost/mh/s.

My point is only that with continually increasing difficulty, the BTC/day drops dramatically in a very short time.

If you spend $800 on a rig instead of $1000, sure you get a better rate.  But you're still only getting 0.1 BTC/day with your $800 or $1000 rig in mid August.  Is that 0.1 BTC/day going to pay itself off?  Not at $17/BTC. 

Again...most speculator who have stated the exact same thing in the past ended up being wrong.  Always factoring in difficulty increase but always assuming a stagnant or declining value.  Really though nobody knows what will happen. 

Can the difficulty decrease?
If the hardware cannot keep up and there are less blocks created then what was it 7 blocks an hour?
Then the difficulty just decreases to X amount so it still maintains the 7 blocks an hour.

Just wondering...

Can you show me where they were wrong?  The increases in difficulty are shown here:

https://spreadsheets.google.com/pub?hl=en&hl=en&key=0AmcTCtjBoRWUdHVRMHpqWUJValI1RlZiaEtCT1RrQmc

6/26  40%
6/15 54%
6/6 30%
5/26 78%
5/18 55%
5/9 43%


I mean really.  The last month has been huge, and you can see that only 2x on that chart has it been negative, and a few negatives are more than cancelled out by 300% and 78% increases, lmao.

Not talking about the difficulty increase...they all said mining would stop being profitable by X date...they so far have been wrong...it might be less profitable but still making money.

So, without new hardware hitting the market, and given 6 30-50% difficulty increases from now to mid-late August, you say it will still be profitable to make bitcoins.

That would require the price of bitcoins to match the difficulty rate, right?

So far that isn't exactly happening, since price depends on demand, not difficulty.

Cool...but how is this new?

I am asking for you to toss out some numbers to back up your claims : )

You can't just say 'I am right' nor 'Others were wrong in the past, therefore I am right'.

What would Bitcoins need to be worth, given a 7,000,000 + difficulty, to be profitable?

I do not need numbers...people said the exact same thing you are saying now 6mos ago...mining continues to turn a profit currently.  My OPINION is that speculators (and myself) have no idea.  Proof of this is in the past threads.

It does however make me wonder why you seem so intent on swaying people from mining...I honestly am not trying to get people to do it, I am just pointing out the flaws in most naysayers...always come with a bunch of numbers that do not take into account value increase.

By your logic mining was never profitable...you do know most early adopters were eating their hardware/power cost while everyone was telling them they were stupid and that BTC would never be worth anything...now everyone is saying the only people who can make money are the early adopters...it gets more and more stupid...everyone thinks they can predict the future behavior of a group of humans by using a bunch of hardware/difficulty calculations.

If you are right...great...I still won't care.  It won't change my decision...just as I hope others come to their own conclusions.


NEVER risk anything more than you can afford to lose, ever...and everything has levels of risk.

See for me, I am GPU mining with 1 card.  You can look up my total net worth by copying my signature link and putting it into block explorer.

I am on these forums to discuss rationally and logically with people about bitcoins.  I am not promoting hysteria, but I am also not promoting blind faith.  People who say "I don't need numbers" are the ones I really begin to question.  "It worked in the past!" These logical fallacies are exactly the wrong way to discuss Bitcoins.  

You claim that value increase is being discounted, but I specifically asked you to put forth what value increase is necessary to keep things as profitable as you claim they will be.  I see that I cannot engage you in logical discussions, so I will bow out.

Probably a good idea for both of us...I have no numbers (I am speculating...I could be wrong and I still would turn a profit somehow) and I was starting to wonder if I was talking to a machine with an extra goto 10 line in the wrong spot.

i love people who always go all-in with each pair. gotta love them.

I've been in worse boats than this one and come out ahead...I will use the computers for Adobe in my other business if this fails...so they will make me money regardless...I have a gaming rig I have not used in 3 months (not due to bitcoin, I just got in, I have just been to busy to play).

Mining sucks and you guys should totally never check my signature!


Mining is fine. It's following the same trends it always has.

But where are your numbers and spreadshits...don't you need those to be right? ;)

It's kind of dilemma for me. What kind of propaganda post should I put in here. Well, definitely more newcomers means less profits due to the higher difficulty. On the other hand, I have other GPU-related stuff to do and I wouldn't mind naive idiots selling their new GPUs cheap en masse.

Any advice?

I thought I already went over this, but anyway. You can't use a select portion of data and claim that it is correct. Every one of those huge jumps in difficulty followed (FOLLOWED) a huge jump in price. The small stagnation of 30% was following a moderate trend up of price after a huge jump of difficulty. Difficulty has followed the money as it should. We are still in the throes of the largest price increase in bitcoins relatively short history bringing in a flux of the largest amount of miners in the history of bitcoin. It is not a coincidence that after a huge trend upwards of mining power around the the difficulty time change (lag time in buying / installing new parts) the hashrate of the networks upward trend slowed significantly. There still is inertia and this will likely cause a continuation of reasonable increase into the next difficulty due to lagtime of mining response, but unless something drastically positive happens (bitcoin price jump or something) the increase will almost certainly level out again until the next big event.

I've already told you specifically what is wrong with those spreadsheets. They enlist static numbers, based on only a very select group of data used to prove the point they are trying to make. That is called selection bias. I'm still not arguing that mining is the best thing since sliced bread, profitability is way way way down due to a number of factors, but all these projection claims that don't include the tag "btw I have no idea if my assumptions will hold true because there is not enough data to allow for any kind of reasonableness" are fallacious.

Warnings: Good. Claiming speculation as fact: Bad.

i've done a simulation in which the average total hashrate increase rate is -4% (2nd derivation). looks awesome to me and more reasonable. maybe it actually is a good idea to keep on building rigs. i mean, you can't expect the network speed to increase at this rate for much longer. first reason, it's exponential. that means more and more investments would have to be made. but i doubt people will invest more _now_ than let's say a week ago. the average "gamer" won't buy an additional AMD card anymore just to increase his hashrate. maybe he won't mine at all (nvidia?), because the profit is not as obvious as it was in the past few weeks. there's still reasonable hope for investments to pay for themselves. i am actually thinking about getting a second card. would be so awesome to let it pay for itself and use it for gaming in a few months. crossfire :3

2 TERAHASHES of capacity have been added to the network just in the last 5 days. That was after Bitcoin went down in value to $17 (so much for "difficulty follows price"!)

The two difficulty decreases were long before most of us knew what a Bitcoin was.

Curiousity: Are you just wrong all the time, or are you purposefully putting out misinformation all the time? Difficulty/hashing follows price, but not immediately. That's why it's been repeatedly called a lagging indicator. It takes days/weeks for people to get their mining equipment delivered, all together, unboxed, put together, installed, up and running, stable and overclocked. The Price Jump to $30 was the biggest bitcoin had ever seen, and with a slurry of news reports inspired a huge rush of people to overextend themselves buying machines (look at beeph for example, dropping > $10,000 because bitcoin was free moniez forever!). Difficulty jumped *right* afterwards. It will jump again, THEN we will start to see price/difficulty effects as people decide whether or not its worth their investment to continue or return based on price vs. difficulty.

A side note, 2THash/sec used to be a lot, now it's 20% of the network power.

It sure seems like more cards are coming online every day, quite a while after the $30 BTC days.

I guess it's possible that not everyone gets cards mining as fast as me...but still! A couple weeks? A few weeks?

When was it last $30? That seems like forever ago.

Could you post your simulation so we can look at it?  I am looking at the difficulty/time spreadsheet I posted above and the 'average total hashrate' is never -4% across any trends I've seen.

I agree it would be awesome for cards to pay for themselves, and I hope mine does pay for itself.  Closing in on I think 4 bitcoins soon.  I still need 20 total to get it to pay for itself, and my math shows that won't happen.  I don't mind, but I am just saying baseless optimism is not the way to go toward BTCs.  I bought my card for gaming too, so up or down, I don't care.  However, for people that are blowing $10,000 on mining, and not understanding that the difficulty is continuing to increase in under 12 days per difficulty, they need to re-examine their calculations.


Regardless of what follows what, difficulty has been going up, quite steadily.  The next increase will likely be around 50%.  It only takes 6 such increases of 30-50% for me to no longer have an incentive to mine, because a difficulty in the range of 7Mil means my single GPU is just spinning its cycles fruitlessly.

I really hope people are objectively, and not subjectively looking at the trends, the media attention, and the numbers.

If these numbers are true, the whole Bitcoin system is doomed.

If one entity possesses more than 50% of the processing power, it can dominate everything because it can get wrong blocks (in their favor of course) verified simply because it has more processing power.

For example verifying some self-created "everyone sent all his bitcoins to me"-Blocks, double-spending, scamming, all you can imagine suddenly comes possible if you have access to such an amount of huge Hashing power.

On the other hand, such an endaveour would have an initial cost of millions of dollars - why would they want to wreck their own system then?

It's just something you mustn't forget.

Given that the new "über-ASIC" would dominate everything else, it could get all the 2016 Blocks for itself, netting 1.5 million $ at 15$/BTC.

But I just realized that the difficulty would explode all over the roof, so actually it isn't that bad. Not likely that the owner of this ASIC would destroy his own business before he has paid off his hardware.

why are you constantly referring to self interest of such party. what is the interest IS to destroy the network.

besides, they could first milk the bitcoin community for that 1 mil and then destroy it - win/win.

Why would someone blast out millions of dollars for nothing?




I mentioned that in my post. 1 mil isn't nearly enough to cover the initial cost of such a device.

whoops, double post

Problem is, everyone keep talking about Thash chips but so far nothing showed up, even just a theorietical project

The LargeCoin team seems to think they have an ASIC on the way.  Whether they really pull it off or not, is anyones's guess.  Do a search on them on the board.

The thing is that there is enough money in it now that some ASIC engineer somewhere is going to give it a try.  The question is when.

And if it can meet the expectations.

I will laugh pretty hard if they end up spending 2 million dollars for 40GH/s or so  ;D

The thing is that even if they create a device that generates 100 MH/s for $600 but consumes lets say 25W, its going to outprice the GPU's anyway, because long time the investment will be worth it and the GPU wont be able to stay profitable at 100Mh/s at 25W. Thats a MH/J of 4, and the most efficient GPU's can only do slightly above 2. As people buy more and more of this ASIC's the difficulty go up and at some point the gpu's will generate bitcoins at a rate that wont pay for the electricity they consume.

I dont think the thread for the GPU's is pure hashing power. The problem will be power consumption efficiency.

Yep. I think GPUs will get overrun by ASICs eventually like CPUs got overrun by GPUs.

Fun stuff, good luck I decided not to buy a mining rig and be happy with my already existant 6870.

It would not. The investments needed for the design and starting up fab process are enormous. The hardware unit cost may be $600, but that would not include the vast investments thrown in for R&D and setting up the production facility. It is a long term investment and I find it kinda weird how people decide to go after it as risks associated with bitcoin are rather high in long term. The bitcoin prices may collapse for a prolonged period rendering your investments useless and that would be a grand fuck up, millions of dollars thrown in the air. Unlike GPUs, noone is going to buy that hardware because it can do nothing but 2xsha256 calculations.