Hey asswipe,
Price actually does matter a lot. Can't pay for your electricity in BTC fixed prices. You pay in currency.
You're welcome,
Someone who runs a data centre
No retard, you still dont get it do you? Power consumption is fixed so the cost of mining back the BTC you spent to buy miners is easily estimated. If you speculate on the price of BTC to calculate your mining ROI (again nominated in BTC not $), you're dumb as fuck. Speculate the price? do it right and TRADE BTC , dumb fuck
Eh, for the most part you're right, the future exchange rate of bitcoin should not play a role in deciding whether to purchase mining equipment. But it does have a marginal effect in two ways.
The first is the cost of electricity, which is priced in a different currency. Using USD as an example and a $0.10/Kwh rate of electricity, a 1 KW miner costs about
BTC0.008 per day to run at an exchange rate of $300. If that miner is current-gen and running at 2Ths (0.5 w/gh - using easy-to-math numbers), it makes about
BTC0.02 per day, for an operating profit of
BTC0.012 per day. Skip ahead to when difficulty doubles, and that profit is down to a mere
BTC0.002 per day. A couple more difficulty increases, and it costs more than it makes, and its bitcoin earning days are over.
Unless the exchange rate changes, and bitcoins increase against the dollar. At an exchange rate of $600, all things equal the cost of electricity per day is now
BTC0.004, which means the same miner is earning a profit of
BTC0.006 per day. The difficulty would have to rise much more for the miner's operating profit to disappear, which means that it will earn more bitcoins overall.
The second is that exchange rate affects difficulty, though to what extent is unclear. This should be obvious from the first point, as the hypothetical miner discussed there would turn off shortly after difficulty doubled if price were stable, but keep running if the price increased. This counters the first effect, though. However, I'd expect (but this is speculation) that difficulty increases would lag price increases to some extent, as some of the difficulty increase would come from new hardware, and that takes time to manufacture. This is particularly true if the price increases after a long decrease or a period of stagnation (kind of like now).
So based on the above, right now, if you think the price will increase, it may not be a bad idea to grab some inexpensive used hardware. Actually, about a month ago would have been the best time to do that, as there isn't much of that on the market right now.
