268GH (January) @ $872 vs. Buy/Sell BTC

[NginUS]

Hi,

I'm considering buying into a hosted mining opportunity where I would pay 6.8 BTC ($872) for 268GH of mining power on a miner that's set to turn on in January.

I'm thinking about whether or not this will be a worthwhile investment considering the following:

a) Difficulty will continue to rise, and I don't know how bad it'll be by the time it starts mining in January.

b) This is to be one of hundreds if not thousands of TH Cointerra miners that'll be flooding the network & going online in January, further accelerating difficulty's rise in early 2014.

"b" would potentially limit these machines' useful lifetimes- ie. they'll all hit a wall early because of the difficulty they all create.

So how long will my machine mine profitably in this environment? I imagine it'll probably earn it's cost back.

What do people think?

Might I do better spending the money I'd be spending on the miner just buying coins during a low point in their price fluctuation, then selling them when the price rises & doing that over & over?

If that were to be the route I were to explore, where would there be resources where I could read about strategies for maximizing profit when doing so? Are there subcommunities in the forums here of people who just trade coins on exchanges like that?

What do people know about that?

Thanks in advance for your feedback.

-NginUS

[Rluner]

No one has a crystal ball. So any outcome is possible.

However I've Inputted your purchase figure and hash rate into a spreadsheet. I used 80% difficulty per month increase from now, as per last few months. I assumed zero pool fees and zero electric costs.

My best guess is after a year you will make under $500 dollars profit.

It's your money I wish you good luck.

[jamesc760]

With Silk Road done and gone, we are looking at a long, slow death of Bitcoins, at least until another Silk Road pops up. I speculate that no one in his/her right mind should buy a miner or invest in BTC right now; the only logical thing is to sell, sell, sell NOW.

[Miz4r]

With Silk Road done and gone, we are looking at a long, slow death of Bitcoins, at least until another Silk Road pops up. I speculate that no one in his/her right mind should buy a miner or invest in BTC right now; the only logical thing is to sell, sell, sell NOW.

You really think people have been buying bitcoins because of Silk Road? People buy bitcoins because of its innovative potential and its future use, nobody cares about what it's currently used for. SR means nothing in the grand scheme of things, and alternatives are already springing up left and right and you can bet on it that the next Silk Road(s) will be even bigger because of all the publicity it got lately. So you go and sell right now please, while I am happy picking up the cheap coins.

Ontopic: Right now it's better to buy/trade bitcoins, investing in mining remains risky because of uncertainty about (timely) delivery, the bitcoin price volatility and the exponentially rising difficulty. Any of those three could completely screw up your ROI. If you just want to mine as a hobby that would be fine I guess, just don't expect to profit from it.

[proteen]

Hi,

I'm considering buying into a hosted mining opportunity where I would pay 6.8 BTC ($872) for 268GH of mining power on a miner that's set to turn on in January.
..

January seems a lifetime away with every difficulty rise.

[crazyates]

http://mining.thegenesisblock.com/a/7db9e14fa3

In a 12-month span, you might break even, but maybe not.

Play around with the numbers on that site to see if it makes sense to you.

[Davyd05]

Not trying to spew this logic but, I see that essentially it doesn't pay off the full amount leaving $27 or so of its cost. If the price of btc were to go up it would cover the cost but then you'd been better off putting the fiat in to btc.

My guess is you have to decide where you think the difficulty is going, I think the estimates for the time frame used were conservative. I don't think a lot of the newer people did all that much research before buying in too a ton of pre-orders from various companies. I would then guess hashing difficulty could continue to rise for as long as there is x amount of rigs coming in to use, I mean if a company is shipping asic stuff now, its gen 2 batch is pre ordering, which mean more sales if people haven't given up hopes and the costs are cheaper as well.

I myself have been leaning towards buying some btc at what I feel will be the low for the next couple months up till Jan-Feb then look at the charts for hashing power and decide whether I want to pull some btc out and mine or just keep investing in the btc.