Bitcoin Forum

I see every second post about some newbie who wants to quit his day job and mine for a living.

You need to learn what difficulty is first and why its important. When I started mining, I had no idea what it was. I just assumed if the price stayed constant I would make the same amount of money everyday.

Difficulty is basically a bad term for newbies. The correct term should be 'Competition ratio'. Basically the amount of coins mined in a day is capped. For ETH its 30000 ETH/day.

Unless there is some network protocol issue this figure will stay constant. So if there is 1 miner, he will receive 30000 ETH a day, if there are 30000 miners all with equal hashrate, each will receive 1 ETH a day.

Hence your enemy isn't only the ETH price, its also the amount of other people that start mining and who's profits you will have to share. In the past, difficulty rarely decreases.

When difficulty increases, it doesn't mean price has to increase. Its a false assumption.

Does this mean you shouldn't mine? No. In fact its highly unlikely you will end up losing money if you start mining. Unless you start a fire and burn all your equipment to the ground.

However for comparison consider this.

RX 470 mining @ 28MH/s ETH today makes ~ $4.63 USD
RX 470 mining @ 28MH/s ETH on March 1 2017 made ~ $1.04 USD

Thanks for the tip.

Do you think it's possible to do mining semi-remotely. I have the chance of mining in a familiar location at a competitive rate. I am able to hire a non tech person to take care of it if necessary (labor is cheap at the location) however I myself won't be able to attend to it in a daily/weekly manner. Does mining need constant attention to the machines or things can be managed remotely easily, thanks.

Thank you for explaining it to this newbie.

I'll use ETH as an example. I'm operating under the assumption that it's popularity (and hence market cap) is bound to rise faster than its difficulty. While mining rewards may dwindle as difficulty rises, the value of mined coins rises faster. Of course, we have no way to know for sure, but is my reasoning at least based on good logic?

Right now since mining is crazy profitable your main concern shouldn't be the power rate. Pretty much anybody anywhere on the planet can mine and net a profit right now.

You are better off mining today at your home then you are getting some remote location going in a couple weeks/months.

But yes you can mine remotely, many do it here.

The rigs do crash from time to time. Especially with the newer GPUs and with AMDs bad drivers. Every few days I need to manually hard-reset a rig. However you can buy some product that lets you power cycle a rig remotely and that should work most of the time.

If you want something that can be left unattended for weeks/months you should look at an Antminer.

Broadly speaking, you are right.  Except your assumption may not hold true.  If the price stagnates or even falls, your rig will quickly become worthless.  Difficulty will likely continue to increase during a period of price stagnation.  Even selling off the parts won't get you much back as ebay will be bloated with them.  From a pure business risk/reward prospective, buying and holding the coins themselves is less risky and possibly more profitable in the long run.  
But not as much fun as mining!

Don't be tempted to see it as more than a hobby.

This is all speculation. But consider this, if you are 100% sure the price will rise, then why not just buy the coin instead of going through the headache of mining.

But like I said before. Rising difficulty doesn't mean rising price. Just look at Bitcoins price and difficulty during 2014-2015.

Suprisingly during the 2014 mining crash. Most of the GPUs held their value pretty well. I think if you listed it for sale during the Summer of 2014 on eBay which was already flooded with GPUs you might of gotten a bad price, especially if you overpaid for it back in Feb/Mar 2014.

However the supply was quickly absorbed and during Christmas 2014 you could of sold it at a decent price. I think I sold my R9 270X for $100 USD in the last quarter of 2014 and I bought them originally for $200 USD the year prior. So only $100 loss per GPU.

Computer equipment holds value very well. The worst are Bitcoin ASICS where most paid $10000 for an ASIC at the beginning of 2014 that later on ended up selling for $200 at the end of the year.

Having done stock and options trading, talking to many falks who has made millions and who got burned, i see correlation with crypto coin world. Many who have quit their daily jobs got burned, some made a fortune. Those who made a fortune seem to be the minority great time, i would say <3% of them all. Of course there are many factors that count, but those who succeeded they always said - DIVERSIFY or dont put all your egg in one basket. I have learned it hard way and i recommend you to learn how to manage your risks. Would you be ok if you would of lost ALL your coins one day ? If you answer YES, then quit your job and do mining, if answer is no, then figure out the way do both. Control your hype. Control emotions. Do not assume anything, do your math.

This right here is the 100% truth and the key to proceed with mining. If you can do those 4 things MA3A mentioned and are still interested afterwards then proceed, but carefully and keep your nose to the wind. ;)

Great PSA post, thank you.  So many are getting into mining now without doing research, these are much needed so people don't recklessly quit their day jobs before understanding how it all works.  It will certainly be interesting to see when difficulty catches up to the price increase.  Power cost is still king.

Giving this a bump because its crazy the amount of new people here who are maxing out their credit cards buying GPUs.

Noobs buying GPU's that are marked up substantially because of them now. They do not realizing the difficulty is going to tank minin profits in a few months between them buying up so much and eventually ETH mining ending.

Have fun selling bulk supplies of extra GPU's when the profitability tanks and the used GPU market is saturated with mining GPU's

There are no guarantees in this world except...

Death
Taxes
& rising difficulty

I'm a newbie here and just got into mining to help pay for the card in my current gaming rig. Due to the volatile nature in the short term of mining I wouldn't quit my day job to mine; though I would see in the long term that coins that are big players like Bitcoin, ZCash, Ethereum (and probably later Ethereum classic when ETH gets moved to PoS) value's will rise.

Honestly I'm trying to decide between putting my money into investing in coins directly or actually making a mining rig (honestly I'm most likely going to be doing both). If I do get into mining it will be with disposable income only (no debt) and I would most likely diversify what coins I would mine. Like I would have both AMD and Nvidia rigs, with AMD mining dual mining ETH + Dec or Pasl and Nvidia mining ZCash. Might possibly add Blastcoin mining to those rigs too later.

On the flipside I could just invest that disposable income in investing in coins and selling them in like 5+ years from now when they are worth a lot more. Haven't decided yet :P

Cheers for the food for though :D

It's not only this, I would recommend you to not buy any GPU right now if the GPU costs more than $200, alts rose because of eth and eth profitability will crash by half and maybe by 75%, you trolls need to understand that there are things eth devs are considering and the first thing is, in few weeks the network instead of right now is 16 seconds to find a block, in few weeks is going to be 30 seconds, that is half the profit you are thinking of, second there is the possibility eth will also be reduced from 5 eth per block to 2.5 eth per block, that will be another half and that will probably happen within weeks and there is the chance is going to pos which will make mining pretty worthless, so forget about mining if rx 570, rx 580 are more than $200. Rx 570 and rx 580 will be sold for $100 in few weeks. If you have the money now, I would advise to buy eth and hold, that will be an easy 400%, but make sure you sell once it hits 150 ~ 200% because it might crash hard hehe

Yeah the devs want to postpone the Metropolis release as late as possible to cap the supply and yes the block time will be 30 seconds so, its like the difficulty doubling again, after it already did 40 days ago.

Preach it

I said the same thing in another thread and people got butthurt , better to let them do what they do , If they spend all this $$ and do not hedge thier bets with trading or ICO's you are basically playing casino games with your money

which is right but with some people who really wanted to understand how mining works maybe they will also risk their money with it,
while others who's looking for quicker and easy earned they will go with ico and try studying trying charts so they can take some advantage
with those who's just buying without any knowledge.

due to shortage, retail price of the new card rise in my country. Very hard to get supply at the moment and ppl are buying card at jack up price :(

Yeah I'm at a point where I'm done trying to warn people. The emotional waters fueling all of this is going to be a tidal wave when it comes crashing down. I've been surfing the wave though using it to my advantage as I flipped all my 470/480 cards into 1070/1080ti's among the hype with little to no money out of pocket and sometimes with extra to spare. My 80+ cards are paid off since last year, so I'm just stacking my funds now while others are fighting to ROI.

I hope people go even harder with buying gear, especially those with high power or overhead costs so I can be there to bail them out, but for pennies on the dollar. We tried to warn but no one listened, so now let experience be their best teacher I say...

Up.

One benefit of mining is that you get to learn a lot more about the currency you are mining.

Bump

Judging by some of the posts I am reading.

This thread that I created 6 months ago is still important and giving it a bump!

Many thanks for your post, as it gratefully helps in newbies in mining.