Bitcoin Forum

How many people here would put thousands of dollars into mining equipment vs bitcoins?

If you think bitcoins will rise in value, both are good investments, but I would like to hear the debate between the 2 separate camps.

It's not really a good question.  The choice comes down to what you think the price of bitcoins is likely to do and what your risk tolerance is (one question is pure speculation and the other very individual).  Mining is lower risk because your capital equipment has resale value, but the profitability of mining (particularly right now) is pretty low.  Buying bitcoin outright carries a far higher risk.  If you think the price of bitcoin is going to rise quickly in the near term and you can tolerate the risk, you're better off just buying bitcoins.  If you think the price is going to hold steady or rise moderately for a long while, you may be better off mining.  If you think the price is going to steadily decline, don't buy or mine (unless you can buy some mining hardware on the cheap due to other selling out).  If you think the price is about to collapse, sell all your bitcoins and mining equipment fast!

When you do the calculations for mining, make sure you're doing your accounting as if you sell every last bitcoin mined as it is mined (even if you intend to keep some or all of your mined bitcons).  The reason is that when you hold them, you are now investing directly in bitcoin and speculating on the future value.  You don't need mining equipment for that, you could more easily just buy the bitcoins you would have mined.

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Don't invest at all.

If you think bitcoins are neat, more useful than current money, or opens the gate for worldwide electronic money then what the hell buy some and spend it on things.

If you are looking to make money off other speculators, then they are expecting the same from you... So any advice you would receive here would be the opposite of what you want to hear.

Being a contrarian I'd say mining is higher risk and also higher potential reward.  If you spend the money on bitcoins instead of mining equipment you'll get as many *today* as you would typically mine with that equipment over 6 months, assuming a steady 8-10% difficulty increase every 10 days.  In addition to fluctuating valuation you risk a release of ASIC miners to the general public during those 6 months, and 7 series making your current hardware both obsolete and worthless - good luck selling your 5830s to recoup your investment when 6870s drop from $155 AR to low $100s after the 7 series midrange hits.  You are one price spike away from a quadrupling in difficulty and NEVER mining as many BTC as you could have bought today.  Having all the bitcoins upfront leaves you more liquid, with more options during the entire time.

However, since rising difficulty makes bitcoins harder and more expensive to obtain by mining thusly making purchase the only intelligent option for anyone bullish on bitcoins, my wallet advises you to invest in mining hardware.

I'm a relative latecomer.  Here are some reasons I decided _not_ to mine.  Fair warning:  I don't really stand behind the validity of any of them.

 - I wanted to establish a position in BTC fairly quickly, then adjust it up or down over time.

 - I did not sense that the bitcoin system needed the extra hashing power at this point in the game.

 - I expect that if I want to GPU mine, I could pick up a used rig when it became unprofitable to mine (and I have access to space in the one of the lowest cost per kilowatt/hour area of the US.)

 - I expect that if I want to GPU mine, GPU production will overshoot demand at some point, and the hardware and software may evolve to better support hashing as well.

Frankly, mining at this point offends my sense of efficiency to some extent.  There are plenty of places where electricity is used simply for the purpose of generating heat.  I am holding out for a solution like a 'Bitcoin hot water heater' and devices along those lines.

In fact, if anyone knows of such projects I'd be interested to hear of them.  I skimmed a few pages of the mining hardware part of the forum and only saw stuff about current methods.  Granted, there is room for improvement in my research effort.

It depends on how much money and time you want to invest.

With mining you have to take a bigger risc in order to get bitcoins. You have to invest much more time, setting up the rig, reasearching etc.
There is the risc of things breaking or competing with a lot of new mining companies.

You also need a room that can get very hot and does not disturb you. If you dont have that, buy.

With buying you can buy for a small amount of money. Thus taking a smaller monetary risc.
Right now price for bitcoin is quite good for buying which means its not as good for mining. Though mining is still good for many.

However in the long term mining has more potential and you get good gaming hardware.

I don't think you should buy and spend.
Rather buy and hold for 1-5 years and see what happens.

mining hardware will return an average  decrease of 8% per a month, not to mention the initial capital to regenerate.

US$10 000 factoring in electricity and maintenance will take you around 120 days to recoup.

mining takes a lot of time and effort. if you factor that in it is more efficient to buy.

Nice post.

I'd like to assume 60% or more resale value on all mining gear.  If I sold the $2000 worth of stuff today, I could likely get 1600-1800 easily.

don't count on recouping the hardware costs.

if the bitcoin market crashes, gpus will flood the market, supply will outweigh demand, causing used gpu prices to drop a further 50%.

IT equipment devalues 40% every 180 days.

And one other minor point.. risk of hardware failure and fire.

You need to do the math and decide what investment suites your personal risk profile.

An idea would be to diversify your portfolio to minimize risk and exposure.

Ie. 20% in resources (gold, coal, oil, etc), 20% in bitcoin, 20% in a 30 day call account/unit trusts, 20% stocks, 20% retirement annuity (*401k).

I think invstment is a good idea. Especialy now when world is overflowed with crypto curencies.
I invested some of my money into @Viberate_com platform.
You can read more about it on link bellow:

https://www.viberate.com/participation

Whish you all to invest the right way!

I think now we need to invest in mining, at the moment it is more profitable than just buying bitcoin.

https://www.cryptocompare.com/mining/calculator/

An s9 gives 900$ profit per month.

Actually for now i would invest in bitcoins considering its increasing price, but Investing in mining equipments would also be much profitable in future as it can give us a stable income. Butstill if i had thousands of dollars i would invest in bitcoins as well as mining equipments. Both would give us good profit in future as well as present.

Buying is much better in my opinion. Mining is very unpredictable.

Its a nice question. In my opinion if you have money, you can try both the options at the same time. But at the present scenario investing in bitcoin is more profitable. Mining is also profitable, but only in long run.You can try ethereum mining using gpu  because its not that costly when compared to antminer . But to earn something from mining you need to have atleast 5 gpus to get a decent income per month.

For long term investment, I would go for Bitcoins because the value of the currency can change drastically and in the long run, you can exchange your money to earn profit.