VAT return also means my gear is significantly cheaper than the private neighbots stuff.
Agreed - but I was talking about one of a million gamers who already has the hardware or will buy future hardware regardless of their Bitcoin potential. So no, your hardware is not necessarily cheaper.
And, btw. - private miner may pay taxes on profit too. I doubt someone with 4-5 computers mining would be counted as non-profit in an audit. More like tax fraud / tax evasion.
Agreed, but if Bitcoins are widely successful he will probably be able to buy something he was going to buy with USD anyway so that's tax avoidance at most - which is perfectly legal. But since taxation of Bitcoins is still somewhat in the gray area we can only speculate anyway.
The average private miners on the other hand have not really an alternative to earn money with her hardware right now, so they might be willing to do so even if it's only marginally profitable.
Yes, but again: For me it is a good business WHILE (!) the private minter puts money on the table in the same country - my whole operations including some profit margin is cheaper than the private guys electricity cost. Ouch.
No, you didn't understand my point: if difficulty is so high that you are earning money while the private miner is losing on electricity cost - you as a company with a large scale mining farm would probably gain more by taking the offer from some other company who has demand for HPC simulations (finance, automobile industry,...) and is willing to pay good money for it.
My point is, that your margin over the private miner is limited by the next most lucrative offer for your computing power - the private miner probably doesn't have alternative offers which makes him worse off in terms of total profit but he might be the one making more Bitcoins.
When he realizes end of the month heot majorly fucked, and would have pucrhased the coins cheaper than his electricity invoice (and I assume some miners get shocked in a month or two, or up to a year in some countries) I make profit. Economy of scale here is brutal.
No, I never argued that a private miner will mine at a loss - how did you draw that conclusion?
Don't forget that we are talking about a future in which Bitcoin is widely successful and therefore don't underestimate the power of a million new Bitcoin users with the most current GPU in their gaming computer (read: hypothetically Peta-hashes in about a year!).
That is until mum comes and reminds little basement miner that it is not his profit if he causes hugh costs in electricity for mom and dad
Again - nobody needs to mine at a loss for my arguments to hold.
Plus - seriously .mining gear is not something I want to run at home. Some computers = LOTS of noise. And talk about the heat here
Some have their computer running 24/7 anyway and don't mind the noise then there are the watercooling enthusiasts and whatnot. I'm just saying that there are a _lot_ of private people worldwide who already have the hardware and can mine Bitcoins at a profit for as long as you as a business would rationally mine Bitcoin professionally.
Agreed - but also for a company this investment is much more risky (read: more unlikely) because of the reason stated above (ASICs are more or less single-purpose) and the additional risk that in the case of some future change to the hashing algorithm of Bitcoin, they will have lost everything.
No, this is a risk, but I think one that is quite controllable. Business is about taking educated guesses. If anything I can dump the cards on the used market. VERY limited risk.
You probably won't get much for your Bitcoin-ASICs if everyone switches to SHA-3 or Bitcoin gets abandoned...
Probably, but only to some degree - I wouldn't count on private miners disappearing in the long run.
No, plenty of idiots around. Seriously, in some countries i expect them to get hammered the moment the electriicity bill hits you. This can take a year (like in germany you only pay once per year, in the itnerim you make down payments on your estimated usage - unless someone checks the meter, some people wil lbe REALLY surprised. Hint: This is MAJOR. We talk about a gear using about 300 USD per month electricity at end user rates there
Mum and dad will scream when Bobby Idiot dumped his savings into 3x3 6990 and they have to pay what is a small car then. How would your family feel about a little higher (10.000 USD) electricity bill?
No idiots needed for the scenario I depicted - don't know why you think private miners are not able to do a simple cost-volume-profit analysis for their mining activity. There are plenty of grown-ups that have gaming equipment and not every youngster is necessarily incapable of rational thought. Also no need to remind me of the electricity rates in Germany - I happen to have first-hand experience
Over the middle run people will realize the negatives. Like noise.
This is like web hosting. Yes, some people host from home. Most dont.
I think mid term we will see large scale mining.
Professional large scale mining will always be a part of the Bitcoin network but I doubt that they will drive private miners out of the market anytime soon. Just make some back-of-the-envelope calculations of a potential business wanting to outhash all the current mining pools combined. As a businessman you surely know that your real expenses to set up such an enterprise are much
more than total_hashrate * cost_of_gpu / hashrate-per-gpu. Go ask Vladimir how come he dares to charge more than that. The higher your costs, the higher your risk - no matter how cheap your credit lines are.