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Author Topic: TO NEW MINERS: trust your feelings...  (Read 9176 times)
Synaptic (OP)
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June 10, 2011, 11:36:54 PM
 #1

I see there has been a huge influx of new miners as of late, and with the recent spike in the exchange rate, it's understandable.

Lately I've been giving this a whole lot of thought, and all my gut instinct tells me that the true price of BTC for a long haul is not the astronomic $100/BTC or higher that the bigbit miners are all hoping for, but about $10/BTC.

I just urge these new guys, specifically the ones that have recently ordered $500-1000+ and ESPECIALLY $1000+ of new equipment with no prior bitcoin experience, to really just take a look at the charts and reflect on everything and trust your feelings.  Listening to the big miner's estimations based on hope is not smart.

Revisit your calculations.  You might be thinking "It's no problem, at the worst, I break even and get the hardware for free within X days."  You need to run your calculations for the next 3 months assuming MINIMUM +90% difficulty per increase, and a $10 BTC price.

Otherwise, you're likely to be in for a rude awakening.

Just look at the charts again.  Natural markets don't behave this way, trust your gut.  Don't get burned.

I cancelled my 4x 6990 rig, cause it would be foolish.  You young guys who are taking risks, please do the same.  My buddy is likely going to lose his girlfriend over BTC mining after blowing their whole savings chasing BTC rainbows...
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June 10, 2011, 11:39:41 PM
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dingus
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June 10, 2011, 11:40:32 PM
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I see there has been a huge influx of new miners as of late, and with the recent spike in the exchange rate, it's understandable.

Lately I've been giving this a whole lot of thought, and all my gut instinct tells me that the true price of BTC for a long haul is not the astronomic $100/BTC or higher that the bigbit miners are all hoping for, but about $10/BTC.

I just urge these new guys, specifically the ones that have recently ordered $500-1000+ and ESPECIALLY $1000+ of new equipment with no prior bitcoin experience, to really just take a look at the charts and reflect on everything and trust your feelings.  Listening to the big miner's estimations based on hope is not smart.

Revisit your calculations.  You might be thinking "It's no problem, at the worst, I break even and get the hardware for free within X days."  You need to run your calculations for the next 3 months assuming MINIMUM +90% difficulty per increase, and a $10 BTC price.

Otherwise, you're likely to be in for a rude awakening.

Just look at the charts again.  Natural markets don't behave this way, trust your gut.  Don't get burned.

I cancelled my 4x 6990 rig, cause it would be foolish.  You young guys who are taking risks, please do the same.  My buddy is likely going to lose his girlfriend over BTC mining after blowing their whole savings chasing BTC rainbows...

So.... don't go by what the miners say...but go by your 'gut instinct.' Got it!

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TurdHurdur
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June 10, 2011, 11:41:12 PM
 #4

Yeah, don't push the difficulty up I want more coins.
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June 10, 2011, 11:55:18 PM
 #5

I see there has been a huge influx of new miners as of late, and with the recent spike in the exchange rate, it's understandable.

Lately I've been giving this a whole lot of thought, and all my gut instinct tells me that the true price of BTC for a long haul is not the astronomic $100/BTC or higher that the bigbit miners are all hoping for, but about $10/BTC.

I just urge these new guys, specifically the ones that have recently ordered $500-1000+ and ESPECIALLY $1000+ of new equipment with no prior bitcoin experience, to really just take a look at the charts and reflect on everything and trust your feelings.  Listening to the big miner's estimations based on hope is not smart.

Revisit your calculations.  You might be thinking "It's no problem, at the worst, I break even and get the hardware for free within X days."  You need to run your calculations for the next 3 months assuming MINIMUM +90% difficulty per increase, and a $10 BTC price.

Otherwise, you're likely to be in for a rude awakening.

Just look at the charts again.  Natural markets don't behave this way, trust your gut.  Don't get burned.

I cancelled my 4x 6990 rig, cause it would be foolish.  You young guys who are taking risks, please do the same.  My buddy is likely going to lose his girlfriend over BTC mining after blowing their whole savings chasing BTC rainbows...

Dude! Your advice found me some rare 6990s!

SchizophrenicX
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June 11, 2011, 12:14:21 AM
 #6

awesome. Go by $10/BTC when after/while correction it's still $20+ right now. then do calculation of 3 months expecting minimum 90+% jumps. I thought we're over that. -.-

I don't think u're ever going to breakeven with such figures. This is a thread to discourage people from getting into mining? or what? I mean yea natural market doesn't behave like this. But I'm quite sure with the exchange falling right now. People do think twice in getting into mining. 90+% jumps is still a way to go.

However, I'm expecting difficulty to cross 1M in 2 or 3 more adjustments if the exchange doesn't stabilize and people just jump into mining blindly. I just earn a little less I guess.

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June 11, 2011, 12:17:46 AM
 #7

I see there has been a huge influx of new miners as of late, and with the recent spike in the exchange rate, it's understandable.

Lately I've been giving this a whole lot of thought, and all my gut instinct tells me that the true price of BTC for a long haul is not the astronomic $100/BTC or higher that the bigbit miners are all hoping for, but about $10/BTC.

I just urge these new guys, specifically the ones that have recently ordered $500-1000+ and ESPECIALLY $1000+ of new equipment with no prior bitcoin experience, to really just take a look at the charts and reflect on everything and trust your feelings.  Listening to the big miner's estimations based on hope is not smart.

Revisit your calculations.  You might be thinking "It's no problem, at the worst, I break even and get the hardware for free within X days."  You need to run your calculations for the next 3 months assuming MINIMUM +90% difficulty per increase, and a $10 BTC price.

Otherwise, you're likely to be in for a rude awakening.

Just look at the charts again.  Natural markets don't behave this way, trust your gut.  Don't get burned.

I cancelled my 4x 6990 rig, cause it would be foolish.  You young guys who are taking risks, please do the same.  My buddy is likely going to lose his girlfriend over BTC mining after blowing their whole savings chasing BTC rainbows...

A very wise decision you made if you ask me. Too bad some others don't take the difficulty into account in their calculations.
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June 11, 2011, 12:20:04 AM
 #8

awesome. Go by $10/BTC when after/while correction it's still $20+ right now. then do calculation of 3 months expecting minimum 90+% jumps. I thought we're over that. -.-

I don't think u're ever going to breakeven with such figures. This is a thread to discourage people from getting into mining? or what? I mean yea natural market doesn't behave like this. But I'm quite sure with the exchange falling right now. People do think twice in getting into mining. 90+% jumps is still a way to go.

However, I'm expecting difficulty to cross 1M in 2 or 3 more adjustments if the exchange doesn't stabilize and people just jump into mining blindly. I just earn a little less I guess.


Can you not read? He said minimum + 90% difficulty not 90+%
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June 11, 2011, 12:26:43 AM
 #9

its true if you are in for the money and not the real bitcoin behind it.
and thank you for cancelling your order, your effort slows down the difficulty for everyone else.
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June 11, 2011, 12:42:07 AM
 #10

Buying a $1000 computer you can't afford otherwise and assuming it will pay for itself with future earnings is risky for sure. I am one of those people who started doing this a few days ago, and since I already owned a computer my only bitcoin-specific investment has been a Sapphire 5830 for C$100 plus tax. I feel pretty comfortable with spending that amount to get into a potentially profitable hobby, with the side benefit that I can use the card for other things if that doesn't work out. On the other hand, spending the same amount on bitcoins directly seems risky to me and not as much fun. I think people know what level of risk they are comfortable with personally.

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rezin777
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June 11, 2011, 12:54:55 AM
 #11

My buddy is likely going to lose his girlfriend over BTC mining after blowing their whole savings chasing BTC rainbows...

ROFL. Sorry, I have no pity for someone who spends shared savings without consulting the other party, and gets dumped by the other party. And if he did consult the girl, and she said go for it, and is leaving him regardless, he is better off without her.

Anyway... "Luke, trust your feelings."

Thanks Ben, maybe I'll make out with my sister while I'm at it.
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June 11, 2011, 12:57:06 AM
 #12

Revisit your calculations.  You might be thinking "It's no problem, at the worst, I break even and get the hardware for free within X days."  You need to run your calculations for the next 3 months assuming MINIMUM +90% difficulty per increase, and a $10 BTC price.

I'm the first to convince people to project conservatively, but this is silly.

Do I recommend projecting your rig at $10/BTC? Absolutely. It needs to be profitable at that number.

Do I recommend projecting 90% difficulty increases? Absolutely (at least in the short term). It needs to be profitable at that number.

BUT, there is no way you'd see both $10 AND 90% increases. At the current price I would think we'll see 50-70% difficulty increases in the short term. At $10/BTC I think you're looking at more like 20% in the short-term and 5% in the long-term.
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June 11, 2011, 12:59:04 AM
 #13

My buddy is likely going to lose his girlfriend over BTC mining after blowing their whole savings chasing BTC rainbows...

ROFL. Sorry, I have no pity for someone who spends shared savings without consulting the other party, and gets dumped by the other party. And if he did consult the girl, and she said go for it, and is leaving him regardless, he is better off without her.

Anyway... "Luke, trust your feelings."

Thanks Ben, maybe I'll make out with my sister while I'm at it.

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I dont like the guy. How many reasons do I have? alot.
How many reasons do I need? none.
I just dont like the guy.

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June 11, 2011, 01:09:35 AM
 #14

If the difficulty jumps 90%, then you will see a lot of people starting to drop out.  I would go until the next difficulty increase after that, but then would probably stop mining.  I don't need to run my  computers overclocked for a week to be gaining 50-100 dollars.  If the difficulty increases 90 percent AND the price of bitcoins falls, then a TON of people are going to bail.

I drink it up!
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June 11, 2011, 01:22:11 AM
 #15

Thanks for your thought but I still deciding to invest money in to BTC mining as I believe that the the difficulty level and the price level will adjust eachother in the long run. So, since I decide to invest in to mining I am not going to be a casual miner. I like this whole idea of BTC and have lots of confident about its future value. So, Yes, I am still going to buy my new rigs.
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June 11, 2011, 01:25:17 AM
 #16

If the difficulty jumps 90%, then you will see a lot of people starting to drop out.  I would go until the next difficulty increase after that, but then would probably stop mining.  I don't need to run my  computers overclocked for a week to be gaining 50-100 dollars.  If the difficulty increases 90 percent AND the price of bitcoins falls, then a TON of people are going to bail.

If many people drop out due to diminishing returns, it would just make it that much more profitable when the difficulty drops!

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June 11, 2011, 01:25:34 AM
 #17

Man, I wish I'd blown all my savings on mining rigs at the start.

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rezin777
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June 11, 2011, 01:33:42 AM
 #18

Man, I wish I'd blown all my savings on mining rigs at the start.


I also wish that I wasn't so prudent.
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June 11, 2011, 02:13:29 AM
 #19

I'm just reinvesting my earning. I had a lot of parts laying around from upgrades in the past, and it was $100 to get a 5830 to start mining with. I almost have enough to get a 6950, which will over double my hash rate. Being a student I'm not paying for electricity, so everything I make I can spend since I've already payed down my initial investment.
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June 11, 2011, 02:51:12 AM
 #20

lol my total investment cost to get into mining was $100. And that was to simply swap my Nvidia card for a Radeon which I will use anyway for gaming regardless whether Bitcoin survives or not. And I've already made my $100 investment back from mining. Anything else is pure profit. But going by some of the money flashed around here for super multi-quad rigs, theres obviously a lot of people out there with money to burn or a lot of idiots..or both..lol

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June 11, 2011, 02:53:02 AM
 #21

price/difficulty co-efficient is 0.9 isn't it? IE as difficulty goes up so does price

I think that's all you need to know

Overclocking = money? Greatest full time hobby ever!
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rezin777
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June 11, 2011, 02:56:59 AM
 #22

IE as difficulty goes up so does price

No. As price goes up, so does difficulty.
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June 11, 2011, 03:01:33 AM
 #23

IE as difficulty goes up so does price

No. As price goes up, so does difficulty.

No. As difficulty goes up, price may go up. Difficulty doesn't go up based on price, it can never go down.
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June 11, 2011, 03:11:12 AM
 #24

IE as difficulty goes up so does price

No. As price goes up, so does difficulty.

No. As difficulty goes up, price may go up. Difficulty doesn't go up based on price, it can never go down.

So when the Bitcoin exchange rate goes up (because of demand), and mining becomes insanely profitable, people don't throw more power at the network, thus increasing the difficulty? OK then. I'll stand by what I said.

What can never go down? Price? Wrong. Difficulty? Wrong.
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June 11, 2011, 03:40:40 AM
 #25

exactly my point.

and whoever was pointing out. +90% and a 90+% jump are really the same thing here. @$10 with those difficulty adjustments. It just ain't possible. Unless a few people threw out all their life savings and matched 90% of the network speed a few before the adjustments and caused like everyone to give up or something.

Who the hell would do that if the coins are at $10. it's just not realistic. I do think you should down the down and up the up when doing budgeting but this is over doing it.

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June 11, 2011, 03:58:16 AM
 #26

IE as difficulty goes up so does price

No. As price goes up, so does difficulty.

No. As difficulty goes up, price may go up. Difficulty doesn't go up based on price, it can never go down.

Not true... It has gone down. And that was in response to a drop in price.

Difficulty from block 112896 was 76193, at the next re-target, block 114912, Difficulty went down to 68979. This was in response to a drop in price that occurred four weeks prior.

I know... March may seem like ancient history, but facts is facts.

My bad, I assumed it wasn't possible to go down.
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June 11, 2011, 04:01:07 AM
 #27

If the difficulty jumps 90%, then you will see a lot of people starting to drop out.  I would go until the next difficulty increase after that, but then would probably stop mining.  I don't need to run my  computers overclocked for a week to be gaining 50-100 dollars.  If the difficulty increases 90 percent AND the price of bitcoins falls, then a TON of people are going to bail.

If many people drop out due to diminishing returns, it would just make it that much more profitable when the difficulty drops!

Don't kid yourself.  The difficulty isn't going to drop.  It may have in the past and it may again in the future, but only after either A) the government starts shutting down exchanges or B)It becomes unprofitable for all but a select few to mine.  The only people who it will be profitable for are those who have invested HEAVILY and have several Ghash/s setups or greater.  The casual miners who bought maybe 1 or 2 cards will take what they can and then sell off the cards when it no longer makes sense to mine.

I drink it up!
Synaptic (OP)
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June 11, 2011, 04:37:33 AM
 #28

Thank you all for the great responses!

There've been too many while I was away to respond to directly, but I'll try to generalize.

First I do want to clarify that all of you that are getting into mining with minimal investment, or with hardware you were planning to get anyway, or with existing hardware you had, MORE POWER TO YOU.  This thread was not started to warn you though, but warn the entrepreneurial spirited ones who are considering, or have already dumped a significant percentage of their savings or credit towards building a rig or rig sets.

Also, I'd like to draw attention to these same "by-product miners" in response to a number of people talking about difficulty increases. It seems to be the prevailing wisdom that when the price falls people will start bailing out on mining. You're certainly correct, but not in as general a way as you'd like to believe.  The only people mining that are going to bail when the price drops are the small time miners who begin incurring a negative cost, and the squeamish big iron; the ones that are going to be cutting their losses by selling off their hardware.  

However, "by-product" miners and the really big iron will still have ZERO incentive to pull out, and if you look at the bulk of the bitcoin network demographics, the ones that will bail at a price drop are not proportional enough to bring down the difficulty a significant degree.

This is simply layman's logic believing everyone will bail on low prices and make it easier for the remainder to be profitable again.  

THE FACT IS, that EVERYONE with a modicum of bullish belief in bitcoin will just keep slogging it out even to price/performance PARITY.  There's just absolutely no reason to pull out until you're incurring negative costs, and again, THE FACT IS, that there is already so much paid off iron at this point that the people who bail will amount to an insignificant portion of the entire bitcoin network's Ghash/s.

You all seem to think that you're more clever than your average miner and if you stay in it, the ones that leave will make you profitable again, BUT THEY'RE THINKING THE SAME THING TOO because it's the most obvious assumption to make!

And again, there's just not going to be as many people incurring a negative cost all at once to affect difficulty in any relatively short time frame to just all of a sudden make mining well profitable again.

<------------------------Chapter 2------------------------->

So that leads me to price.  I have seen so much foolishness from armchair economists on why bitcoin is going sky high.

I'm not an Ivory Tower economist be any stretch myself, but I'm also not emboldened by speculative biases, and do have a personal education in real markets to draw on.

At this point, the only thing propping up this price is speculators.  There is no real bitcoin economy yet.  There is nothing tangible to prop up the current prices.  There is no perceived value except by the very people gambling on it's success.

THE FACT IS, that the only factor that matters in bitcoin's real value is the lay person, and the issue with this is that bitcoin by it's very nature it's technical and complicated to understand (for your common man). Sure, you can market it in various layperson friendly ways like "paypal without the fees" as a basic example, but guess what guys: That's bullshit, and we all know it.

I'm a programmer of 2 years and a web-designer before that, have always been into computers and very technically oriented. It took me two solid days of research before I felt I understood bitcoin, and there are still deep unanswered reservations that only time will produce answers for.

The REAL value of bitcoin based on real and tangible economic activity at this point, based on my reflections on real economies and exchanges, is likely lower than $10/coin, but I will be generous in that respect because the ones that DO use it do in fact see an inherent advantage which lends value.

But do yourself a favor in trying to justify even a $30/BTC, by doing this simple exercise: Try explaining bitcoin and why they should start using it to your parents. Then, after they've paid you the courtesy of entertaining your spiel and maybe even agreeing that it's a great idea and propping up your confidence, try to get them to buy some bitcoins.  

NOT buy bitcoins with your help.  NOT buy bitcoins after giving them links to instructions on how to get started.  ONLY by asking them to buy bitcoins completely on their own, without any help other than being made aware of them, and then start using them to buy things.

Hey, get the fucking point yet?  They won't.  They NEVER WILL.  Unless you have rather extraordinary parents who are undoubtedly in a small minority.

If however you can get the most mundane of parents to go ahead with diving into bitcoin, LET US KNOW, cause then we can DEFINITELY assume a $30 bitcoin is a good bet based on future economic activity.

Thank you for your time, and I look forward to your responses, rebuts, and/or agreements.

May the wise have ears,

~ Synaptic


EDITS: Spelling/grammar/formatting
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June 11, 2011, 04:57:19 AM
 #29

I'd stay away from buying an Uber-rig now, it's too late to make a fortune. Nothing wrong with picking up a couple 58xxs now though, especially if you game and can still use them if mining does become unprofitable.

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Synaptic (OP)
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June 11, 2011, 08:08:46 AM
 #30

I'd stay away from buying an Uber-rig now, it's too late to make a fortune. Nothing wrong with picking up a couple 58xxs now though, especially if you game and can still use them if mining does become unprofitable.

I would tend to agree with you but it appears all the worthwhile 5xxx are sold out!  And, unfortunately the worthwhile 6xxx are just such poor mhash/$ performers, that I can't recommend even picking up a couple cards here or there, UNLESS you're definitely going to game with them as well.

Always be overly wary about the difficulty, that's what's going to kill you.

Oh, and that $30/BTC is a pipe dream if you're just hitting the pavement...
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June 11, 2011, 10:09:50 AM
 #31

You need to look at both Mhash/$ and Mhash/J. Once your rig has paid for itself your running cost is primarily determined by the price of electricity and Mhash/J  (assuming you are not paying additional datacenter colocation costs).

I did run the numbers for my own setup and assuming the conservative $10/BTC  exchange rate I have at least 2 difficulty increases to go through before I need to worry about rechecking the numbers. Electricity is expensive where I live ($0.20 kW/h) and I pay $18 a day to generate  5 Ghash/s. Note that my rig has already paid for itself so this is my only cost (excluding capital depcreciation).

I am not completey convinced that it would be too late for new miners to start today, though I can see the end for me possibly a few months away. Still, I would probably keep "donating" 500 Mhash/s to support the network as long as it remains viable.
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June 11, 2011, 10:58:09 AM
 #32

Don't kid yourself.  The difficulty isn't going to drop.  It may have in the past and it may again in the future, but only after either A) the government starts shutting down exchanges or B)It becomes unprofitable for all but a select few to mine.  The only people who it will be profitable for are those who have invested HEAVILY and have several Ghash/s setups or greater.  The casual miners who bought maybe 1 or 2 cards will take what they can and then sell off the cards when it no longer makes sense to mine.

Could you (or someone else) elaborate on how investing HEAVILY in mining makes it more profitable? Unless you're talking about custom-designed chips (asics), I just can't see how mining gets more profitable or less risky by sinking more cash into it. Are you talking about electricity discounts..?

While casual miners with 1-2 cards can probably find other uses for their hardware (gaming), I have a hard time imagining what I'd do with several computers packed with 5850's once mining turns unprofitable. Basically; I think what you're saying sounds completely backwards, please enlighten me.
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June 11, 2011, 10:58:23 AM
 #33

You need to look at both Mhash/$ and Mhash/J. Once your rig has paid for itself your running cost is primarily determined by the price of electricity and Mhash/J  (assuming you are not paying additional datacenter colocation costs).

I did run the numbers for my own setup and assuming the conservative $10/BTC  exchange rate I have at least 2 difficulty increases to go through before I need to worry about rechecking the numbers. Electricity is expensive where I live ($0.20 kW/h) and I pay $18 a day to generate  5 Ghash/s. Note that my rig has already paid for itself so this is my only cost (excluding capital depcreciation).

I am not completey convinced that it would be too late for new miners to start today, though I can see the end for me possibly a few months away. Still, I would probably keep "donating" 500 Mhash/s to support the network as long as it remains viable.

Congrats on getting over the break even hump, especially with such a nice rig(s)!

You're a perfect example of the kind of person I'm talking about though that has already paid for their rigs, that will never leave the mining network until you're incurring a negative cost. For you it might be sooner than other because of your electricity cost.

However another interesting thing to realize is that there are MANY miners who even AFTER beginning to incur a negative cost, will STILL continue to mine because they're speculating on the price of BTC/$ in the future.

All things considered, especially with the massive influx of miners recently (including myself) and ever more coming every day (so many!), everyone's difficulty calculations are likely highly under-estimated.

The invested miners mantra of "price will follow difficulty" is just not going to hold through this phase in the life of bitcoin. That part of bitcoin's "puberty" is over. We've reached or in the next few days will reach critical mass where the difficulty over the next two periods will make new hardware impossible to even break even on.

I'd LOVE to hear a well reasoned rebut, especially a logical well thought out explanation why price will continue to follow difficulty, but I fear anyone up to the challenge will simply have nothing to fill the gap of fact that there's no real economy supporting the insane speculation, and no foreseeable economic bulk forthcoming to justify their arguments.

But I'm willing to be surprised!  Please surprise me! Smiley
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June 11, 2011, 11:04:29 AM
 #34

Don't kid yourself.  The difficulty isn't going to drop.  It may have in the past and it may again in the future, but only after either A) the government starts shutting down exchanges or B)It becomes unprofitable for all but a select few to mine.  The only people who it will be profitable for are those who have invested HEAVILY and have several Ghash/s setups or greater.  The casual miners who bought maybe 1 or 2 cards will take what they can and then sell off the cards when it no longer makes sense to mine.

Could you (or someone else) elaborate on how investing HEAVILY in mining makes it more profitable? Unless you're talking about custom-designed chips (asics), I just can't see how mining gets more profitable or less risky by sinking more cash into it. Are you talking about electricity discounts..?

While casual miners with 1-2 cards can probably find other uses for their hardware (gaming), I have a hard time imagining what I'd do with several computers packed with 5850's once mining turns unprofitable. Basically; I think what you're saying sounds completely backwards, please enlighten me.


I specifically mean those who have already dropped multiple thousands of $'s on multiple Ghash/s rig sets who have already completely paid off their iron on the recent price spikes.  They've already recouped their costs, have massive ghash/s online, and can just coast through whatever profits they can muster until their Ghash/J becomes negative.

And as I addressed in the post prior to this one,  many of these guys are not only in it for the short term gains, but the speculative long term gains (user Vladimir being a prime example) and will likely continue to mine long after their Ghash/J is negative, simple on future speculation alone.

Meaning, massive and unsustainable difficulty vs. profitability is here to stay in a big way and guys trying to get in now with big iron (or even around 1 Ghash/sec unless they got 4x or more of the 5830's for $109) and ever break even are playing a losing game, and I see no possible rebut to this fact.

But again, I welcome  a surprise.
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June 11, 2011, 11:08:07 AM
 #35

maybe just better investing in the power companies Smiley

Will

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June 11, 2011, 11:09:54 AM
 #36

maybe just better investing in the power companies Smiley

Will

Lol, or AMD...
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June 11, 2011, 11:27:32 AM
 #37

I see there has been a huge influx of new miners as of late, and with the recent spike in the exchange rate, it's understandable.

Lately I've been giving this a whole lot of thought, and all my gut instinct tells me that the true price of BTC for a long haul is not the astronomic $100/BTC or higher that the bigbit miners are all hoping for, but about $10/BTC.

I just urge these new guys, specifically the ones that have recently ordered $500-1000+ and ESPECIALLY $1000+ of new equipment with no prior bitcoin experience, to really just take a look at the charts and reflect on everything and trust your feelings.  Listening to the big miner's estimations based on hope is not smart.

Revisit your calculations.  You might be thinking "It's no problem, at the worst, I break even and get the hardware for free within X days."  You need to run your calculations for the next 3 months assuming MINIMUM +90% difficulty per increase, and a $10 BTC price.

Otherwise, you're likely to be in for a rude awakening.

Just look at the charts again.  Natural markets don't behave this way, trust your gut.  Don't get burned.

I cancelled my 4x 6990 rig, cause it would be foolish.  You young guys who are taking risks, please do the same.  My buddy is likely going to lose his girlfriend over BTC mining after blowing their whole savings chasing BTC rainbows...

It doesn't work like that Synaptic. First of all, if we had sustained prices the the $10 level it is unlikely that Difficulty would grow beyond about 1,400,000 after about three months, and we would not see substantial increases from that level. +90% Difficulty per increase my ass... And this would be a great opportunity for people that want to get into Bitcoin mining because instead of getting fractions of Bitcoin from their rigs in a few months (as is the current prospect) they could expect to get maybe 20 BTC/mo, and mining would actually be a great way of accumulating Bitcoin instead of just buying them.

Alas... Not a chance in hell that is going to happen.

If Bitcoin fell to $10 I would continue to buy, and mine, because I know that market pressures will drive the price to blistering levels again and THEN we could see your purported +90% Difficulty increase. To presume any kind of price stabillity at $10, or any other price level in this absolutely microscopic market is absurd. All it will take is some very modest media exposure to run the price up 100%. There are plenty of people with plenty of money that have yet to discover Bitcoin that could very casually affect the exchanges in a big way.

It might be peasant if Bitcoin could remain a backwater for geeks and freedom freaks with their happy little currency and their Alpaca socks, but there are business types with bigger plans...

Here is a clue. Difficulty goes up as it has BECAUSE the exchange rate has been going up. Happy little $10 Bitcoinville is not part of the economic plan for this iteration of the currency. That means big iron, and lots of it.

Hang on for a ride.

I'd like to address you instead of being general because you offer a wide target with this post. A few things pop out at me about you:

You exhibit a large speculative bias without basis. This is your largest fallacy by far because you assume there's these nebulous rich folk and bullish big business interests just ready to swoop in and inject BTC with their throbbing, well funded members. Well I ask you, friend:

On what ephemeral basis would they want to do that?

Oh, let me guess, you'll tow the BTC party-line mantra of what a superior conceptual currency it is, and how cryptomantic incantations and all that electronic sorcery goodness will save us from the ailing USD or whatever.

Fact is, friend, that rich folk and big business speculate on ECONOMIC DEMAND, and in the interesting case of BTC, there is no economic demand forthcoming.  See my mental exercise of getting your parents involved a few posts back.

Trust me brother, there's no rick folk with any modicum of business savvy and certainly no board of directors that are going to invest in a bunch of anarcho-libertarians and tech-nuts latest new-fangled financial obsession. Period.

Well to do investors and businesses will only fall in when individuals aged 25-50 can use bitcoin as easily and without thought as plastic.

Be honest chodpaba, and anyone else reading.  How long did it take you to mentally grasp bitcoin, and more importantly, how LONG and with how much EFFORT did it take you to actually GET ANY bitcoins by mining or market purchase?

If you're honest, the answer will fall neatly under the umbrella statement "A lot fucking more effort than a credit card!"

And it will always be thus, that is the NATURE of bitcoin.

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June 11, 2011, 04:01:29 PM
 #38

I'd stay away from buying an Uber-rig now, it's too late to make a fortune. Nothing wrong with picking up a couple 58xxs now though, especially if you game and can still use them if mining does become unprofitable.

I would tend to agree with you but it appears all the worthwhile 5xxx are sold out!  And, unfortunately the worthwhile 6xxx are just such poor mhash/$ performers, that I can't recommend even picking up a couple cards here or there, UNLESS you're definitely going to game with them as well.

Always be overly wary about the difficulty, that's what's going to kill you.

Oh, and that $30/BTC is a pipe dream if you're just hitting the pavement...

NCIX has a few left in stock, and if you're Canadian you can price match them with canadacomputers down to $99 each.

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June 11, 2011, 04:14:56 PM
 #39

Canada computers is getting cleaned out too, tons of 5830's when I got my Sapphire for $99 a few days ago and now there is one across the whole chain.

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June 11, 2011, 04:18:59 PM
 #40

I see there has been a huge influx of new miners as of late, and with the recent spike in the exchange rate, it's understandable.

Lately I've been giving this a whole lot of thought, and all my gut instinct tells me that the true price of BTC for a long haul is not the astronomic $100/BTC or higher that the bigbit miners are all hoping for, but about $10/BTC.

I just urge these new guys, specifically the ones that have recently ordered $500-1000+ and ESPECIALLY $1000+ of new equipment with no prior bitcoin experience, to really just take a look at the charts and reflect on everything and trust your feelings.  Listening to the big miner's estimations based on hope is not smart.

Revisit your calculations.  You might be thinking "It's no problem, at the worst, I break even and get the hardware for free within X days."  You need to run your calculations for the next 3 months assuming MINIMUM +90% difficulty per increase, and a $10 BTC price.

Otherwise, you're likely to be in for a rude awakening.

Just look at the charts again.  Natural markets don't behave this way, trust your gut.  Don't get burned.

I cancelled my 4x 6990 rig, cause it would be foolish.  You young guys who are taking risks, please do the same.  My buddy is likely going to lose his girlfriend over BTC mining after blowing their whole savings chasing BTC rainbows...

all I got from this is that your buddy needs to ditch his GF regardless because she's just into him because of the $...

gotcha...
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June 11, 2011, 04:36:38 PM
 #41

Well, just look at the charts. Every price/difficulty spike there would be miners influx, that's it Smiley
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June 11, 2011, 04:46:53 PM
 #42


all I got from this is that your buddy needs to ditch his GF regardless because she's just into him because of the $...

gotcha...

+1 LOL!!!
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June 11, 2011, 06:09:17 PM
 #43


all I got from this is that your buddy needs to ditch his GF regardless because she's just into him because of the $...

gotcha...

+1 LOL!!!

Yeah, you 3 that have commented on this so far sure are smart...

She's actually pretty awesome, I've known both of them since college and they're quite a good couple. Apparently she was reluctant to agree to using their savings and suggested a number of smarter alternatives (selling one of their cars that they rarely drive was one of them), but he is so involved in this idea with BTC signs in his eyes that he worked into her for days until she capitulated. Now that she gave in she's starting to talk about the potential rewards too, excitedly (some kind of odd form of Stolkholm's syndrome? or sunk cost fallacy?).

It's my estimation that when he looses their wedding nest egg on this idiotic idea of mining on the idea that "at the worst" he could just break even and sell the hardware, and in fact takes a loss and sells the HW at a fraction of his costs, that she'll likely be so devastated at being taken advantage of (and basically having been fucked out of their amazing honeymoon she wanted and a number of other post-marriage plans they had...Europe, for one) that she will leave him in disgust.

She's a sweet girl that was sucked into a fools dream, and I hope she bails on him, because I warned him too and he's just dead set on this bullshit.

So I guess to sum up what I'm saying is go fuck yourselves.  Yep, that's pretty much it really.  Go fuck yourselves, you know nothings.

Good day, Sirs.  Good day.
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June 11, 2011, 08:40:02 PM
 #44

Well then....
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June 12, 2011, 12:10:06 AM
 #45

I'm new here, but do you guys do a "Thread of the day"?
Here's my nomination!

 Huh

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June 12, 2011, 12:26:14 AM
 #46

I'm still going to order an ATI Radeon HD5870 for mining, if the plan to win the money back in xx days/weeks/months fails I'll simply use it for BOINC or F@H or gaming basically.
If it does win the money back I think it would be fair to get another one, but I know my limits. Mining would probably cease to exist for most people if extreme elites competing amongst themselves were to come.
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June 12, 2011, 12:31:46 AM
 #47

She's a sweet girl that was sucked into a fools dream, and I hope she bails on him, because I warned him too and he's just dead set on this bullshit.

LOL, didn't you say he was likely to lose his girlfriend at the start of the thread? Sounds more like wishful thinking on your part.

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June 12, 2011, 12:33:45 AM
 #48

spent 2300 usd on my mining rig Smiley and i dont regret it.

2x 6990

K U R D I  S T A N
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K U R D I S T A N
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June 12, 2011, 12:35:23 AM
 #49

If you can't stand the heat, its time to get out of the kitchen.

If you like my post please feel free to give me some positive rep https://bitcointalk.org/index.php?action=trust;u=18639
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June 12, 2011, 12:36:03 AM
 #50

spent 2300 usd on my mining rig Smiley and i dont regret it.

2x 6990
at least you can play Rage/Doom4/Prey2 on this ;-)
proabably even on two/three screens -)
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June 12, 2011, 06:29:52 AM
 #51

I'm still going to order an ATI Radeon HD5870 for mining, if the plan to win the money back in xx days/weeks/months fails I'll simply use it for BOINC or F@H or gaming basically.
If it does win the money back I think it would be fair to get another one, but I know my limits. Mining would probably cease to exist for most people if extreme elites competing amongst themselves were to come.
Thanks man, we need more people doing F@H and BOINC! not just BTC in their head 24/7.
I have been BOINC / F@H for maybe 5 yrs. Every piece of hardware I buy I would have them in mind.
For example, most people go with the cheapest CPU, I actually buy Core i7 CPUs, so I can contribute to F@H while making some $ in bitcoin.
You will feel terrible if you are only into bitcoin for profit, and failed. But you would feel really good when your Core i7 help to find the cure to some disease.
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June 12, 2011, 04:23:14 PM
 #52

I'm still going to order an ATI Radeon HD5870 for mining, if the plan to win the money back in xx days/weeks/months fails I'll simply use it for BOINC or F@H or gaming basically.
If it does win the money back I think it would be fair to get another one, but I know my limits. Mining would probably cease to exist for most people if extreme elites competing amongst themselves were to come.

Given how long the possibilities of mining will last, if I were an extreme elite (assuming you meant "rich") I would just buy the bitcoin. I couldn't be bothered with hiring some IT people and overseeing the building of a rig network. Why bother?
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June 12, 2011, 04:53:19 PM
 #53

Good topic.  Trust your gut is important.  Don't stomach more than you can take. 

The golden rule still applies.

"If the stock is making you losing sleep at night, sell it!"
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June 12, 2011, 05:26:17 PM
 #54

Good topic.  Trust your gut is important.  Don't stomach more than you can take. 

The golden rule still applies.

"If the stock is making you losing sleep at night, sell it!"

I say give more to your stomach than it can take and use your head to compensate. This requires the use of many sticky notes!!!!   Tongue
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June 12, 2011, 09:03:00 PM
 #55

"Trusting your gut" is actually the opposite of what you're recommending. "Trust your rational thought process" would be much better advice.

Make the best prediction you can based on the data you have, calculate risks for all probable eventualities. Act accordingly.

Anything else is foolish.
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June 12, 2011, 09:32:13 PM
 #56

"Trusting your gut" is actually the opposite of what you're recommending. "Trust your rational thought process" would be much better advice.

Make the best prediction you can based on the data you have, calculate risks for all probable eventualities. Act accordingly.

Anything else is foolish.

The world requires foolishness.

Defying the British Empire was foolish.

Flying the first airplane was foolish.

Flying into space was foolish....

Rational thought is very limiting. Without that fire in your belly, intuition, tapping into the infinite creativity of the universe and letting go of logic (which is predicting based on past events), life is not truly lived.

Risk must be taken to evolve. Otherwise you just live in fear and miss out on the birth of spontaneity.

edit: from an American perspective.
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June 12, 2011, 10:02:15 PM
 #57

None of those things were done based on intuition. All required rational thoughts and motives.
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June 12, 2011, 10:07:45 PM
 #58

None of those things were done based on intuition. All required rational thoughts and motives.

All of those carried major, unpredictable risks though (and spaceflights suffered massive losses in the first 40 years of operating including deaths).

In the end everything in the real world is a leap of faith. Pure mathematics and theory only works in simulations.

I'm not saying to 'trust your guts' and abandon due diligence.
I'm saying everything in the world is volatile, unstable, and ultimately unpredictable in the long term.

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June 12, 2011, 10:46:14 PM
 #59

I just spent the last of my USD networth on building a rig, 50/50 split with my dad, after I explained him the concept. I have all of my funds currently in bitcoin, and none in US Bank Notes. I sleep a LOTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT T better at night.
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June 12, 2011, 10:52:37 PM
 #60

I just spent the last of my USD networth on building a rig, 50/50 split with my dad, after I explained him the concept. I have all of my funds currently in bitcoin, and none in US Bank Notes. I sleep a LOTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT T better at night.

Nice. Do well. What's your set up?
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June 12, 2011, 11:57:07 PM
 #61

3 5850s with open case; external fan cooling them all under 60C
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June 13, 2011, 02:41:09 AM
 #62

I just spent the last of my USD networth on building a rig, 50/50 split with my dad, after I explained him the concept. I have all of my funds currently in bitcoin, and none in US Bank Notes. I sleep a LOTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT T better at night.

I hope you're joking. Nothing wrong with investing but putting all your eggs into one basket is never a good idea. I guess you might you live with your parents; it wouldn't matter much though then.
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June 13, 2011, 03:17:47 AM
 #63

I just spent the last of my USD networth on building a rig, 50/50 split with my dad, after I explained him the concept. I have all of my funds currently in bitcoin, and none in US Bank Notes. I sleep a LOTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT T better at night.

I hope you're joking. Nothing wrong with investing but putting all your eggs into one basket is never a good idea. I guess you might you live with your parents; it wouldn't matter much though then.

He bought 3 5850's with his loot. What do you think he was going to do with that? Earn 8% toward his retirement? I think he's done a good thing in taking the capital and trying to enlarge it. If he loses out, he's young. A long life of work awaits him.
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June 13, 2011, 03:25:13 AM
 #64

None of those things were done based on intuition. All required rational thoughts and motives.

All of those carried major, unpredictable risks though (and spaceflights suffered massive losses in the first 40 years of operating including deaths).

In the end everything in the real world is a leap of faith. Pure mathematics and theory only works in simulations.

I'm not saying to 'trust your guts' and abandon due diligence.
I'm saying everything in the world is volatile, unstable, and ultimately unpredictable in the long term.

LOL, yeah flying into space was really a rational motive. What exactly did we gain from going to the moon again? Some cool rocks? Aside from showing the world we were better than those evil ass communists and their little satellite, there was really very little point to our space program. I'm not saying there is no point to space travel, but let's be real, that crap happened cuz we didn't like Karl Marx. (Hating someone is not rational).
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