Bitcoin Forum
December 09, 2016, 04:24:27 AM *
News: Latest stable version of Bitcoin Core: 0.13.1  [Torrent].
 
   Home   Help Search Donate Login Register  
Pages: « 1 [2]  All
  Print  
Author Topic: How can mining ever make me any money?  (Read 9142 times)
DigitalAsh
Newbie
*
Offline Offline

Activity: 14


View Profile
June 07, 2011, 07:35:48 PM
 #21

I would sell enough bitcoins to build a decent mining rig, say you sell 25 btc you can make that back in a month and then continue profiting. It is an investment, either you think it's worth it or you don't.
How can you mine 25(!) BTC with equipment worth ~500 USD that still needs to be shipped within 1 month?! This is BAD advice!

Also, if you say: "But he can get 500 USD back, as the conversion rate increases if the difficulty goes up!" then I say: "If he does not 100% need this computer right now, he will make more then 500 USD by keeping the 25 BTC and selling them in 1 month!"


Paying Bitcoin to mine is a bad deal in very many cases. This is one of them!

You're probably right, I'm still a delusional noob most likely Tongue

It's up to him, if it were me I would probably sell some btc and build something, even if that's horrible advice. I could use a new computer anyway lol
1481257467
Hero Member
*
Offline Offline

Posts: 1481257467

View Profile Personal Message (Offline)

Ignore
1481257467
Reply with quote  #2

1481257467
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1481257467
Hero Member
*
Offline Offline

Posts: 1481257467

View Profile Personal Message (Offline)

Ignore
1481257467
Reply with quote  #2

1481257467
Report to moderator
1481257467
Hero Member
*
Offline Offline

Posts: 1481257467

View Profile Personal Message (Offline)

Ignore
1481257467
Reply with quote  #2

1481257467
Report to moderator
1481257467
Hero Member
*
Offline Offline

Posts: 1481257467

View Profile Personal Message (Offline)

Ignore
1481257467
Reply with quote  #2

1481257467
Report to moderator
Sukrim
Legendary
*
Offline Offline

Activity: 1848


View Profile
June 07, 2011, 08:02:21 PM
 #22

Exactly - if you need a new computer, get one that can mine while you don't use it.

If you don't need a new computer, don't buy one!

https://bitfinex.com <-- leveraged trading of BTCUSD, LTCUSD and LTCBTC (long and short) - 10% discount on fees for the first 30 days with this refcode: x5K9YtL3Zb
Mail me at Bitmessage: BM-BbiHiVv5qh858ULsyRDtpRrG9WjXN3xf
NetTecture
Full Member
***
Offline Offline

Activity: 140


View Profile
June 07, 2011, 08:22:07 PM
 #23

Damn, and I felt good about my 4 x 6990s.

How will you be powering the 6990s? I had a Thermaltake 1500W and it wasn't enough for 3 x 6990s in one case.

We got 7 6990 this week and now get another 5 next week;) Upped the order to 4 servers. Then we stop. No more power in the office Wink

Told my staff to start looking for rooms for 200 servers Wink 20 Racks. Will buy 5 server a month (+1 other to start so I have a multiple of 5) the moment we can actually power and cool them Wink 300kw needed Wink The GOOD news: 7 cents per khw Wink During the day. Less during the night Wink

Lets see how long I invest Wink And when I feel like stopping.
BombaUcigasa
Legendary
*
Offline Offline

Activity: 1414



View Profile
June 07, 2011, 10:01:00 PM
 #24

equipment worth ~500 USD that still needs to be shipped within 1 month?! This is BAD advice!
What do you mean? I can just go out and buy parts from stores around my home. Worst case, I need to wait 2 days for shipment. Wtf 1 month?!

Also I doubt that you took difficulty increases into consideration - and right now mining is EXTREMELY profitable, expect this to change!
We don't need to, difficulty follows price. That is, recent history shows that price is proportional to difficulty. So if difficulty increases, the price will increase to match $/day. Added bonus: your mined bitcoins become more valuable.

Unless any miner can come forth and show with his data that this is not the truth.
Sukrim
Legendary
*
Offline Offline

Activity: 1848


View Profile
June 07, 2011, 10:14:48 PM
 #25

How can you mine 25(!) BTC with equipment worth ~500 USD within 1 month?! This is BAD advice!
What do you mean? I can just go out and buy parts from stores around my home. Worst case, I need to wait 2 days for shipment. Wtf 1 month?!
You cut the quote... maybe it's easier understandable this way.

About the recent babble of "Difficulty follows price!!!!!111" (+add some skewed excel-charts where 99% of data points are crammed in one corner to the mix):

Unfortunately this chart seems to be discontinued - I'll still link it as a warning though:
http://bitcoin.atspace.com/income.html
Please note the logarithmic scale!

If price increases as you say, you're better off cutting difficulty (+ noise + electricity costs + work hours + heat...) from the equation and just keeping BTC, as they will increase each difficulty increase anyways in value as well! Roll Eyes

Mining would only pay off if you end up with more BTC by mining after some time. With current increases, it doesn't look like you will mine 25 BTC within the lifetime of a card that costs 25 BTC right now. Also you have to add constant costs like electricity + work to that equation!

https://bitfinex.com <-- leveraged trading of BTCUSD, LTCUSD and LTCBTC (long and short) - 10% discount on fees for the first 30 days with this refcode: x5K9YtL3Zb
Mail me at Bitmessage: BM-BbiHiVv5qh858ULsyRDtpRrG9WjXN3xf
bcpokey
Sr. Member
****
Offline Offline

Activity: 462


View Profile
June 07, 2011, 10:28:47 PM
 #26

How can you mine 25(!) BTC with equipment worth ~500 USD within 1 month?! This is BAD advice!
What do you mean? I can just go out and buy parts from stores around my home. Worst case, I need to wait 2 days for shipment. Wtf 1 month?!
You cut the quote... maybe it's easier understandable this way.

About the recent babble of "Difficulty follows price!!!!!111" (+add some skewed excel-charts where 99% of data points are crammed in one corner to the mix):

Unfortunately this chart seems to be discontinued - I'll still link it as a warning though:
http://bitcoin.atspace.com/income.html
Please note the logarithmic scale!

If price increases as you say, you're better off cutting difficulty (+ noise + electricity costs + work hours + heat...) from the equation and just keeping BTC, as they will increase each difficulty increase anyways in value as well! Roll Eyes

Mining would only pay off if you end up with more BTC by mining after some time. With current increases, it doesn't look like you will mine 25 BTC within the lifetime of a card that costs 25 BTC right now. Also you have to add constant costs like electricity + work to that equation!

Your graph assumes someone cashes out daily. Although it's a convenient argument for people saying "Zomg coin speculation means you shoulda just bought coins!" it's not true. There is nothing to the argument.

Here's a simple scenario, but not oversimplified:

25BTC = $475 USD today. Cash out, buy 2 5870s from ebay at inflated prices, wait 4 days for shipping. Put it in existing rig.

You now have 850Mhash/second, and about 6 days of this difficulty left, give or take.

Assuming low variance -- That's 9 BTC before jump.
If we assume a 30% difficulty increase thats roughly 11.16 more BTC (20 total) after 10 days.
Assume another 30% difficulty increase that's roughly 8.9 BTC after 10 more days.

30 days total: 29.06 BTC. You now have more BTC than you started with, the new price of BTC is irrelevant, and you also have $400 worth of video cards. The reason I say price of BTC is irrelevant is that 4 BTC = $75, far less than the cost of electricity. If BTC value is lower you would have lost money on holding BTC. IF BTC value is higher you made more money than you would have anyway.

If you change difficulty to say 40% increases you get 9 + 10.8 + 8.3 = 28, still more
50%: 9 + 10 + 6.7 = 25.7

This is about the limit of the 3 difficulty window return scenario. 60% requires 4 difficulty jumps, and is incredibly unlikely as a scenario. As it would be a 2.3M difficulty after 40 days month, or a 400% increase in difficulty / hashing power (16.something THash/second).


I'm not suggesting OP do this, but I would like to point out the fallaciousness of the idea that it is always better to buy coins rather than mine and mining will never pay for itself. In fact right now is an auspicious mining time. It can change, but that is where we are now. The scenario for buying coins is huge difficulty increases coupled with only moderate increases in coin value. This happened before and can happen again.
kirby9058
Jr. Member
*
Offline Offline

Activity: 50


View Profile
June 07, 2011, 10:54:38 PM
 #27

While investing your bitcoins into mining hardware might lose you money in the sort term, you can keep generating more coins for a long time with new hardware. If you can take the hit, I would do it. Sure, it might take awhile to get back what you spent, but it will eventually pay for its self. What else are you planning on doing with that 50BTC? Holding onto them isn't guaranteed to make you any more or less money.
BombaUcigasa
Legendary
*
Offline Offline

Activity: 1414



View Profile
June 07, 2011, 11:02:52 PM
 #28

If price increases as you say, you're better off cutting difficulty (+ noise + electricity costs + work hours + heat...) from the equation and just keeping BTC, as they will increase each difficulty increase anyways in value as well! Roll Eyes

Mining would only pay off if you end up with more BTC by mining after some time. With current increases, it doesn't look like you will mine 25 BTC within the lifetime of a card that costs 25 BTC right now. Also you have to add constant costs like electricity + work to that equation!

So we have two scenarios:
A. I stop mining and keep 100 of mined bitcoins so far for the cost of one month.... and have them worth 200*X$ in a month
B. I continue mining and get to 160 bitcoins in 1 month for the cost of electricity and stuff for the cost of two months... and have them worth 320*X$ after that month

Hard to choose, I think I will go with B?
Sukrim
Legendary
*
Offline Offline

Activity: 1848


View Profile
June 07, 2011, 11:22:51 PM
 #29

So we have two scenarios:
A. I stop mining and keep 100 of mined bitcoins so far for the cost of one month.... and have them worth 200*X$ in a month
B. I continue mining and get to 160 bitcoins in 1 month for the cost of electricity and stuff for the cost of two months... and have them worth 320*X$ after that month

Hard to choose, I think I will go with B?

Question is:
Will you mine more Bitcoins until your hardware fails than you'd get if you sell your hardware and buy bitcoins instead?
If yes, mine along.
If no, sell hardware.

Currently nobody can give you an answer, as it depends on difficulty developments, that are difficult to predict. Here in europe for example I could buy 58xx cards in the dozens... and Bitcoin is barely known and unpopular, as they are heavily traded only in USD. Once MtGox also trades in EUR, I expect a HUGE increase of demand and miners!

It might however also be that now the ceiling has already been reached and we'll settle at ~1 million difficulty, only increasing when new GPU generations are released.

Just do a difficulty vs. exchange rate chart yourself and you'll see we're currently heavy in a mining zone, only held up by demand of people who heard "Bitcoin is the new sh!t" in the news. This can change any moment, a more realistical/sane exchange rate would be ~10 USD/BTC for the current difficulty. The longer we stay in this zone, the more people will order GPUs and bring them online, driving difficulty up.

https://bitfinex.com <-- leveraged trading of BTCUSD, LTCUSD and LTCBTC (long and short) - 10% discount on fees for the first 30 days with this refcode: x5K9YtL3Zb
Mail me at Bitmessage: BM-BbiHiVv5qh858ULsyRDtpRrG9WjXN3xf
BombaUcigasa
Legendary
*
Offline Offline

Activity: 1414



View Profile
June 07, 2011, 11:34:22 PM
 #30

Except that at current difficulty excluding hardware and time, a bitcoin costs at most 2$ in energy to create.
Pages: « 1 [2]  All
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!