New miners with only profit in mind, you need to rethink before buying equipment

[chungenhung]

So, MtGox price is now $10 per coin.
We all know a lot of wanna get rich quick kids got in these few weeks.
The market price got pushed way up to $30+, and now falls to $10. Who knows, it might be $5 by tomorrow.

My advice is, if computer is not your hobby don't do it. And if you have no use for your pc part other than mining, don't do it.
I have been running a few computers with 4x nVidia cards since the 8800GT days, and actually have use for them.
For bitcoin, I bought a few AMD cards, but I still have other uses for them if bitcoin do die and become unprofitable.

I don't really mine for profit, I kept most of my bitcoins.
If bitcoin completely fails, meaning no one would even do bitcoin to bitcoin trading, I still have uses for my machines.

If you are only in for a quick profit, you will probably look back after the bitcoin failure and realize you are really foolish.
Again, to new miners, don't invest a ton of money just hoping that bitcoin value will be high, as the market proves it, it sure can swing like crazy.

Just my $0.02

[1714029187]

1714029187

[1714029187]

1714029187

[1714029187]

1714029187

[1714029187]

1714029187

[Vanquistador]

So, MtGox price is now $10 per coin.
We all know a lot of wanna get rich quick kids got in these few weeks.
The market price got pushed way up to $30+, and now falls to $10. Who knows, it might be $5 by tomorrow.

My advice is, if computer is not your hobby don't do it. And if you have no use for your pc part other than mining, don't do it.
I have been running a few computers with 4x nVidia cards since the 8800GT days, and actually have use for them.
For bitcoin, I bought a few AMD cards, but I still have other uses for them if bitcoin do die and become unprofitable.

I don't really mine for profit, I kept most of my bitcoins.
If bitcoin completely fails, meaning no one would even do bitcoin to bitcoin trading, I still have uses for my machines.

If you are only in for a quick profit, you will probably look back after the bitcoin failure and realize you are really foolish.
Again, to new miners, don't invest a ton of money just hoping that bitcoin value will be high, as the market proves it, it sure can swing like crazy.

Just my $0.02

I agree.  I only recently heard about bitcoins, three-four days ago.  I've decided to take it on as a hobby.  I purchased another 6970 (I had one for gaming already... and two will allow me to buy that 30" I've been eyeing...)

I then purchased about $100~ worth of miscellaneous computer supplys at my local Frys (screws/coords/a fan and a power cable or two), and I set up old husks of computers with old 5xxx and 4xxx series cards to be used as miners.  It's been fun.  So far I've only made something like $60 in BTC, nothing close to the $450 or so that I've invested so far, but I've now set up 3 computers that I could now pretty easily sell (As opposed to husks) and my "time" spent was well worth the knowledge and fun.  The fact that the mining may actually net a profit is in the back of my mind, hoping, but not depending on it. 

If I make a "profit" off of the system(s) I've built for cheap, I'll probably start playing the market a bit just for fun.  /shrug

[Nath]

Also to consider: The system regulates the number of BC mined to 6*50 per hour in the moment. This means: The more miners there are, the less each of them gets. The size of each share is proportional to the hash-rate of a miner, so you may out-power other miners for some time, but in the end, your share is always proportional to the total has-rate of the all miners. So if you think to tell all your friends and their cat: Think again. OTOH: The more people know about BC, the higher the exchange rate may get...

And all this has nothing to do with the current exchange rate of BC. This rate mainly depends on market expectations and influx of real money. So expectations that the price of BC in $ will grow together with difficulty may be disappointed. In the moment I think this is simply coincidence because both influx of new miners and influx of money stem from public interest and this grow in a similar way.

[Chick]

Plus, I can show off to my friends ( who think i'm a dedicated nerd ) my 2 mining rigs.

"Whoa man, wtf is that?!"

 

[grue]

Plus, I can show off to my friends ( who think i'm a dedicated nerd ) my 2 mining rigs.

"Whoa man, wtf is that?!"

 

it's a heater that generates money!

[Vanquistador]

Plus, I can show off to my friends ( who think i'm a dedicated nerd ) my 2 mining rigs.

"Whoa man, wtf is that?!"

 

it's a heater that generates money!

If only I didn't require constant air conditioning and instead required a heater... >_<  (Central Texas)

[hugolp]

Plus, I can show off to my friends ( who think i'm a dedicated nerd ) my 2 mining rigs.

"Whoa man, wtf is that?!"

 

it's a heater that generates money!

Its magic!

[itsagas]

Nothing to think about.  It is just math. 

- how long to pay off rigs including electricity?
- then profit for x months
- then throw away video cards in the garbage


Simple.

[hugolp]

Nothing to think about.  It is just math. 

- how long to pay off rigs including electricity?
- then profit for x months
- then throw away video cards in the garbage


Simple.

The problem is that it is not that simple. To calculate you need to know the difficulty of mining and the exchange of bitcoin and the currency you pay electricity with (dollar, euros, ...) for the next months. And if you knew that you would probably make more money speculating.

The difficulty changes (roughly) every 14 days and depends on the power of the Bitcoin network, which changes as new miners and new rigs are added. Can you tell me what difficulty is going to be in 2 months? In 4? In 6?

The exchange ration changes even more. Can you tell me what the exchange ratio is going to be in two months? In 4? In 6?

Basically you can not do the maths. You can speculate and make your guess, but at the end of the day its not guaranteed. Mining is risky. You can end up eating your hardware if the difficulty goes up a lot and the exchange does not. And the difficulty is going up a lot in the next iterations.

[itsagas]

Nothing to think about.  It is just math. 

- how long to pay off rigs including electricity?
- then profit for x months
- then throw away video cards in the garbage


Simple.

The problem is that it is not that simple. To calculate you need to know the difficulty of mining and the exchange of bitcoin and the currency you pay electricity with (dollar, euros, ...) for the next months. And if you knew that you would probably make more money speculating.

The difficulty changes (roughly) every 14 days and depends on the power of the Bitcoin network, which changes as new miners and new rigs are added. Can you tell me what difficulty is going to be in 2 months? In 4? In 6?

The exchange ration changes even more. Can you tell me what the exchange ratio is going to be in two months? In 4? In 6?

Basically you can not do the maths. You can speculate and make your guess, but at the end of the day its not guaranteed. Mining is risky. You can end up eating your hardware if the difficulty goes up a lot and the exchange does not. And the difficulty is going up a lot in the next iterations.

- include estimates for difficulty for next 5 rounds in your projections
- make different estimations based on varying BTC price

Doing this you can still get a pretty good idea when you will pay off your mining equipment. 

And yes, you are correct, there are no guarantees, it is risky and not easy. 

But the decision is based on your math in the end.  (and risk tolerance once you know your numbers)

[hugolp]

- include estimates for difficulty for next 5 rounds in your projections
- make different estimations based on varying BTC price

Doing this you can still get a pretty good idea when you will pay off your mining equipment.  

And yes, you are correct, there are no guarantees, it is risky and not easy.  

But the decision is based on your math in the end.  (and risk tolerance once you know your numbers)

Yes, doing the maths is a good idea. It will give you a more clear vision of what could be. Im doing it.

The problem is that at the end of the day all your maths could account to nothing. The bitcoin price exchange could skyrocket again and give you record profits as the new miners take a while to set up new rigs. Or the bitcoin price exchange could collapse and you would eat all the hardware.

You can do all the maths you want to get a clearer vision of the "what if", but no math is going to tell you what is the right decssion.

[itsagas]

- include estimates for difficulty for next 5 rounds in your projections
- make different estimations based on varying BTC price

Doing this you can still get a pretty good idea when you will pay off your mining equipment.  

And yes, you are correct, there are no guarantees, it is risky and not easy.  

But the decision is based on your math in the end.  (and risk tolerance once you know your numbers)

Yes, doing the maths is a good idea. It will give you a more clear vision of what could be. Im doing it.

The problem is that at the end of the day all your maths could account to nothing. The bitcoin price exchange could skyrocket again and give you record profits as the new miners take a while to set up new rigs. Or the bitcoin price exchange could collapse and you would eat all the hardware.

You can do all the maths you want to get a clearer vision of the "what if", but no math is going to tell you what is the right decssion.

No one said mining was a zero risk game.      Don't risk what you can't afford to lose. 

[Fakeman]

For the hobbyist who already had a suitable computer and bought one or two ATI cards at a reasonable price, paying off that GPU cost seems pretty likely unless the price crashes a lot lower than $10, on the order of a couple of weeks to a month. That's a risk I was willing to take, and even if I was totally wrong I have other hobbies that bring in a bit of money. Since they are all things I enjoy doing, it doesn't bother me if I don't always come out ahead as much as I hoped. If some people find they took risks they couldn't cover, nobody can say they didn't know what they were getting into.

[Vanquistador]

I'm trying my best to convince my roomate not to spend thousand of dollars into cooling/new hardware at least until the new difficulty change when we can recalculate estimated costs... no such reall luck so far.  Despite my best attempts he thinks this is a "get rich quick scheme". 

[Mousepotato]

I got my rig set up and running just as my previous machine jumped the shark.  So now I got a badass 5870 box that plays WoW/SC2/MW2/etc waaaay better than my old machine (a laptop lulz) and mines like 40x faster.  I needed a new machine anyway so whatevz.