Bitcoin Forum

I'm thinking about building a mining rig or to just buy bitcoins, seems that buying bitcoin at these low prices is the way to go? say I have 3200 to build a system and get 2600Mhash I can only generate 700 bitcoins a year. if I spend 3200 to buy bitcoins say at these price I can buy 500 bitcoins. which is more risky?

Depends primarily on your electricity rates, but also on your outlook. Mining components are a relatively illiquid investment, and you probably won't be able to recoup >60% what you invested on anything but the GPUs (unless you buy a particularly energy-efficient PSU, perhaps). Your ability to react to rapid and dramatic market shifts will be crippled -- if BTC rises from $6/BTC to $8/BTC, unless you've been hoarding coins, there's not any way for you to take advantage of that situation. OTOH, if the value of Bitcoin drops dramatically to become near-worthless, you're not out too much because the components you use can just be sold off. Mining also guarantees income (not profit, though), fwiw.

If you buy electricity <$.15/kWh after all fees & taxes, I'd say go for mining. Otherwise, buy the coins if you want to get in BTC.

Right now its way more profitable to mine ( if you can invest into the hardware ) vs buying. When it was less than $3 you were just exchanging electricity for btc.

Based on those numbers I would say buy but you should be able to build a more efficient rig (MH/$). 

I agree: you can do better in the efficiency stakes.

At this point, you won't have a year to generate those bitcoins. This phenomenon has occured before: the price now is 20% of that in 2011-06 but the difficulty is 200%. In ten months, the mining revenue will effectively halve, and the difficulty may still increase. I would suggest purchasing the bitcoins now, unless you have a way of creating a very efficient rig.

Ya looks like I'm gonna buy bitcoins, I mean what will really happen when the blocks get cut in half to 25? will bitcoins be more rare? driving the price up? if your mining are you hording and waiting for a good price to sell or are you selling whenever?

Its always a good question what will happen when the amount of bitcoins generated is cut to half. But something is going to happen for sure, some miners might stop generating, or maybe the price will double. Only time will tell

you should look into FPGA boards they seem to be the go and for 20watts and 380hashes for just 580$ u cant go wrong!!

- and it only takes ~7 months to break even!

You need to start doing some profitability figures. When I purchased all of my hardware BTCs were worth around $3.5 / coin. They got up to around $7.00 / coin not too long ago and are holding steady around $5.50-6.00. I've been kind of kicking myself for not spending the money I spent on hardware on BTCs at this point. I could have doubled my initial investment in roughly a month and a half if I had invested in coins. Instead, I now have a large stack of noisy and hot computers in my garage... My goal is to get them up and running as quickly as I can to come closer to breaking even.

You need to look at quite a few things when considering where you want to put your money; hardware prices, electricity prices, break even point, trending coin values, how you expect to get your money to your currency, and simply if you have the technical skills to setup an efficient miner. The one thing that has been holding me up over the past couple weeks has been fighting with setting up my linux boot drives. Hardware wise, everything is sitting there ready to go. All it is waiting on is me to get the software side up and running which I have been struggling with the whole time.

If I were to invest in equipment again, I would look into a nice ITX system with as many FPGAs as I could purchase. People say it may be boring, but you're talking about making an investment, not a hobby. I'll take a boring way to profit any day. Set it, let it run, enjoy the low noise, heat, and high efficiency.

I have done very much of both: buying and mining.

tl;dr: If electricity is free for you, mine.  If not, buy.

I sold off my mining gear recently.  That should tell you all you need to know about what I think.

Investing in mining is something I see as a losing proposition for one big reason: there are so many other miners willing to mine at a loss.  While this sounds silly, it's true only because the loss is being imposed on someone other than the person getting the bitcoins.  It's either a botnet master (who doesn't have to pay the power bills for the machines he hacks) or it will be renters who impose the cost on the landlord or other tenants, or the kids mining on their parents' power bills.

Unless you are getting a screaming deal on the power, or a screaming deal on the hardware, the days of free easy money are over.  Mining is only really lucrative when the Bitcoin price has unexpectedly jumped very quickly and the difficulty hasn't caught up, which takes about a month.

I am convinced that the groups making FPGAs wouldn't be selling FPGAs and would be keeping all the FPGA hardware to themselves if it were seriously that lucrative.  No, what we have is FPGA sellers promising "your unit has been tested for at least 2 weeks straight" - an amazing amount of testing for an electronic product!  What this really means is they are playing both hands: their entire inventory is kept busy mining for them until sold, but the fact that they'll sell them to you says the amount they're charging you is worth more to them than the mining output.  That's called the FPGA people being smart and maximizing their investment in having put their product together - unfortunately, it's only sure to be profitable for them.

This post is depressing.