Nice. I like your setup. Low overhead and great cooling potential.

He said it took him 1 month to pay off his mining rig. If that 600% rise in BTC didn't occur, then it would have taken him 6 months just to break even on his mining rig. Actually more with rising difficulty and an additional 6+ months of electricity costs. Either way he was betting on BTC value going up, so your suggestion that it's unfair to factor that rise into this argument is baseless.

And like I said earlier, he made his decision over a month ago, which was an entirely different and much more forgiving mining environment. And he still would have been better off buying BTC directly. Now it's much harder to make mining profits if you're buying expensive computer parts.

Here's my position: Don't invest anything you're not 100% comfortable throwing away into the bitcoin ecosystem. I don't think anyone will argue with that. My secondary advice is to invest intelligently if you're going to do so, and take the rapidly rising difficulty into account.

Go back and read my original post. It includes a list of many of the small overheads, risks, and fees that prospective miners might not take into account. It also details why rising difficulty could easily make your mining rig worthless in short order. It's all valid, logical, factual information. It was meant to inform. But for some reason that doesn't stop everyone from thinking I'm here with nothing but evil intentions.

Why not? If you saw someone about to make a bad investment with bad information, wouldn't you say something? I'm not just going to sit here and watch the carnage.

vladimir, I think you missed the point of the post.

tomcollins was showing that if he had bought BTC on the exact day he starting his mining rig, then sold the same BTC on the same day he cashed out his mining BTC, he would have made much more profit. tomcollins didn't pick those dates, mjsbuddha did.

Earlier in this thread you justified going to a lot of effort and spending a lot of money to mine at a loss out of nothing more than passion. Now you're questioning why I'm spending a few minutes per day posting in a forum?

Honestly, I'm stunned at the amount of misinformation that floats around these forums, and I cringe every time I see someone rushing out to pour money into dedicated mining rigs without understanding what rising difficulty means to their profits.

Read through the profitability posts here. The majority of them go something like this:

1) Look up video card hash rates on the wiki
2) Look up hardware costs on Newegg
3) Put projected hash rate numbers into generic income calculator with current difficulty and exchange rates
4) Multiply current projected income by 3 months, subtract upfront hardware costs
5) Become convinced that buying a mining rig is the best decision they can make

Of course, by the time the hardware shows up difficulty is up by 30% and quickly rising. These people aren't going to come anywhere near their projected profits. Meanwhile, it's stunning how hard people try to convince themselves and each other that they made the right decision.

It's like politics. If you can mathematically or logically prove that someone is wrong, chances are good that s/he will actually become more convinced of their correctness. Happens all the time, and it's happening here now. No amount of math or models or facts seems to convince people otherwise.

Well done.  

Not to mention, I didn't start this thread telling people to not buy rigs to start mining on April 1st. I started this thread to tell people not to buy rigs now that difficulty has gone up and is rapidly increasing.

I'm not sure how you went from "I built a rig 5 weeks ago when the difficulty was much lower and broke even by cashing out at the peak of the market" to "building a mining rig right now is still very profitable".

Venmo appears to be in pipe-dream, spam-the-forums stage. To be honest, I'm still not entirely sure what it is they do, but it definitely doesn't involve trading BTC for USD at the moment.

Don't forget that those same moves in the value of bitcoin will also swing the present value of your mining rig.

Buying a mining rig is not, necessarily, less risky. Hardware depreciation and electricity costs are very real.

Unless you buy everything used, get it delivered, configured, and up and running ASAP, and then could resell the parts for close to what you paid, it's not.

And don't underestimate how difficult it can be to buy all of the parts individually and have a bunch of sellers deliver them all to you on time. By the time your last part arrives, the economics will have changed drastically.

50 days is almost enough time for 5 difficulty increases. The next one is already projected to be over 30%.

If this increase is 30%, and the next increase is 30%, etc. Then after 5 difficulty increases of 30% you'll be making a bit more than 25% of what you're seeing now.

Take the difficulty increases into account, run your projection in a spreadsheet by difficulty periods (about 10-11 days each) and then calculate your payoff.

Any mining profitability calculations beyond a few does absolutely must take rising difficulty into account.

You're a few pages too late for the conspiracy theory talk. Come back when you have some math or logic to debate with.

For miners to start leaving the pool, miners will have to reach the point where electricity costs outweigh the value of bitcoin mining. If it comes to this and you just recently bought hardware, you're screwed because you'll not only be paying electricity, but paying off the hardware as well. And difficulty probably won't go down in this case, but the growth will slow.

If you're falling back on the 'bitcoins may be worth more' bit then like I've said before, a better bet would be to buy bitcoins.

Good call on not buying a dedicated mining rig.

Unless you have spare computers lying around, you also need a motherboard, processor, RAM, case, PSU, etc. By the time all of that shows up and is configured, the next difficulty will have arrived. And now you're pretty invested.

A few weeks ago when you bought your 5850s, it made perfect sense to do so. Now, it's much more of a gamble. Whether you buy bitcoins directly or buy mining hardware, you're making a bet on bitcoin value going up.

You're not looking at the whole picture.

When you buy a mining rig, you also have to pay for electricity, cooling, maintenance as parts fail, etc. Your hardware loses value rapidly as the next generation of gaming cards and supporting hardware comes out, and especially as your warranty expires.

Try this: Start with an imaginary balance of zero. Subtract the cost of your mining hardware. Add back the resale value of your hardware in one year (Usually 60% of what you paid if you get a good deal). Subtract the cost of 1 year of electricity to run that hardware 24/7.

For many rigs and locations, this value will be small, zero, or often negative.

Now take the value of bitcoins you expect to earn. This is a bit tougher, but the important part here is to be honest with yourself about difficulty increases. 30% difficulty increases every 10 to 11 days will follow the current trend. This means in 2 months, you will only be making 20% of the bitcoins you're making today. A year from now, about 1% of what you're making today.

Obviously, mining isn't going to be seriously profitable for very long unless the value of BTC continues to go up with difficulty. So now you're betting on BTC going up indefinitely. But if you're really going to bet on BTC going up indefinitely, why wouldn't you just buy some BTC right now?

Personally, I wouldn't invest anything significant in BTC unless you like to gamble. That includes buying mining hardware. Don't underestimate the number of cash-strapped college students who already have gaming GPUs and free electricity.

Full disclosure: I am mining with a 5870 that I already owned. The financial models and projections I base my claims on sprang from my analysis of whether or not I should add another card to my machine for mining. It doesn't take much math to realize that by the time the card showed up, the mining boat would have sailed. I would have broken even after several months, but the profits weren't nearly the rosy predictions many forum members here have.

Then, I came across threads here where people were spending thousands of dollars to build mining rigs and expecting to make their money back right away, with no apparent understanding of the huge difficulty increases coming down the pipe. I started this thread to balance the gold-rush sentiment out and make people think a little bit harder before plowing their money into mining rigs.

And the noble, passionate miner you speak of is probably not as common as you might think. Just take a look at the Overclock.net bitcoin thread where people were desperately searching for Radeons so they could make bank without any work.

I think the real problem here is any discussion of 'right' and 'wrong'. This is a currency, and to be successful all users must be free to do with it as they please.

Sorry if I appeared a bit abrasive. You're definitely on the right track with your efforts and your mentality.

You might be want read over tomcollins' projections, though. He ran several different scenarios depending on the exchange rate going up or down and at different rates. In other words, the exchange rate doesn't matter as much as you might think.

And we've been over that flawed argument already, too.

tomcollins was kind enough to share his projections of mining profitability with exchange rate increases/decreases taken into account.

If you're betting on the exchange rate going up, then buying bitcoins will net you a profit without buying rapidly depreciating hardware and paying for expensive electricity.

You must realize the total network computing capacity is over 1000 Ghash/s right now. 10GHash/sec is less than the day-to-day variations in computing capacity.

There's a strong trend in this thread. People either:

• Look at the charts, run their own calculations/models, and determine that buying mining rigs is a very poor decision
• Ignore the math, charts, and rising difficulty, and instead rely on conspiracy theories to brush my arguments aside

Even the guy who said the trick was to buy cheap hardware admitted that it's no longer straightforward to buy hardware cheap enough to make it work.

Whatever you think my motives are (I assure you I am not trying to manipulate the market with a forum post  ) you can't argue with the math. So far no one has provided any sort of projections or calculations that show I'm wrong. Conspiracy theories don't count.

So I have to ask: What calculations / projections did you run that made a five-figure hardware investment worthwhile?