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Author Topic: Bitcoin mining will never pay off with GPUs for dedicated miners.  (Read 11880 times)
rograz
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June 19, 2011, 01:18:02 AM
 #21

What I am saying is that you will get a better return just buying right now.  Unless you already have a gaming machine, or are going to buy a machine for gaming as well.  Then it is just free money until the power costs more than the bitcoins.

The growth rate of difficulty has been 4% a day for the last year, so yes, mining rigs have been less profitable than just buying bitcoins for the last year.  If the network growth slows down to ~2.5% a year, then it starts making sense.  The first year of bitcoin, the growth rate was almost flat, so you could make more money mining than buying bitcoins.

Keep in mind this is only about dedicated mining rigs.  If you already have the equipment, there is nothing to lose by mining.  At least for another 60 days when it reaches electricity costs.


Obviously, higher risks generally means greater chance at making it big but you also pose the risk of losing more, anything else would be silly. But just because I was willing to sink 2k$ into hardware doesn't mean I would ever have spent that much directly into BTC at the stage when I entered into mining so the 2 are never directly comparable unless we start talking about a larger scale of investment.
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June 19, 2011, 01:24:13 AM
 #22

What I am saying is that you will get a better return just buying right now.  Unless you already have a gaming machine, or are going to buy a machine for gaming as well.  Then it is just free money until the power costs more than the bitcoins.

The growth rate of difficulty has been 4% a day for the last year, so yes, mining rigs have been less profitable than just buying bitcoins for the last year.  If the network growth slows down to ~2.5% a year, then it starts making sense.  The first year of bitcoin, the growth rate was almost flat, so you could make more money mining than buying bitcoins.

Keep in mind this is only about dedicated mining rigs.  If you already have the equipment, there is nothing to lose by mining.  At least for another 60 days when it reaches electricity costs.


Obviously, higher risks generally means greater chance at making it big but you also pose the risk of losing more, anything else would be silly. But just because I was willing to sink 2k$ into hardware doesn't mean I would ever have spent that much directly into BTC at the stage when I entered into mining so the 2 are never directly comparable unless we start talking about a larger scale of investment.
That is true.  In the end even if bitcoins go to $0, you will still have some hardware you can sell on ebay.  So it is better to say that if the price of bitcoins goes down, buying hardware has a greater return (less loss) than buying bitcoins themselves.  But if bitcoins go up, they are a better investment as long as the network growth is above 2.5% a day.
Swishercutter
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June 19, 2011, 01:37:28 AM
 #23

What I am saying is that you will get a better return just buying right now.  Unless you already have a gaming machine, or are going to buy a machine for gaming as well.  Then it is just free money until the power costs more than the bitcoins.

The growth rate of difficulty has been 4% a day for the last year, so yes, mining rigs have been less profitable than just buying bitcoins for the last year.  If the network growth slows down to ~2.5% a year, then it starts making sense.  The first year of bitcoin, the growth rate was almost flat, so you could make more money mining than buying bitcoins.

Keep in mind this is only about dedicated mining rigs.  If you already have the equipment, there is nothing to lose by mining.  At least for another 60 days when it reaches electricity costs.


Obviously, higher risks generally means greater chance at making it big but you also pose the risk of losing more, anything else would be silly. But just because I was willing to sink 2k$ into hardware doesn't mean I would ever have spent that much directly into BTC at the stage when I entered into mining so the 2 are never directly comparable unless we start talking about a larger scale of investment.
That is true.  In the end even if bitcoins go to $0, you will still have some hardware you can sell on ebay.  So it is better to say that if the price of bitcoins goes down, buying hardware has a greater return (less loss) than buying bitcoins themselves.  But if bitcoins go up, they are a better investment as long as the network growth is above 2.5% a day.

So you are encouraging people to buy bitcoin and discouraging mining...so my guess is you are a miner trying to get the difficulty to drop or an investor trying to get the value to go up (or both), either way...good luck.  It can only improve my position at this point.
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June 19, 2011, 01:42:00 AM
 #24

So you are encouraging people to buy bitcoin and discouraging mining...so my guess is you are a miner trying to get the difficulty to drop or an investor trying to get the value to go up (or both), either way...good luck.  It can only improve my position at this point.
Well, I doubt I am going to make enough difference in a forum to change the price of anything either way.  I'm certainly not going to change the 4% per day of network growth.

I'm not discouraging mining either.  If you already have a gaming machine, you would be a fool not to mine, since it would be free money.  I'm just saying to not buy a new machine only for mining that you will never use for anything else.

Again, if the network growth goes down to 2% or so, it will make sense to buy hardware again.

Unless you think bitcoins are likely to seriously drop, in which case, you should buy mining hardware as a hedge.
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June 19, 2011, 01:46:18 AM
 #25

As a rule of thumb, compare the amount of bitcoins you could buy with the money for your hardware with the number of bitcoins you will be able to mine considering increasing difficulty. Whatever is higher is better. (Note: this does not include the price of electricity).

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June 19, 2011, 01:57:51 AM
 #26

As a rule of thumb, compare the amount of bitcoins you could buy with the money for your hardware with the number of bitcoins you will be able to mine considering increasing difficulty. Whatever is higher is better. (Note: this does not include the price of electricity).
That is the central problem.  The difficulty doubles every 18 days.  Which means your output halves every 18 days.  Until that gets more reasonable, you can't make a profit.

See http://bitcoin.sipa.be/ to see the increase curves.

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June 19, 2011, 03:38:45 AM
 #27

no one really knows, as you can't predict the future.
Just remember, when there is profit to be made, there will always be risk associated.

Trading MtGox USD for Dwolla/ACH deposit/Chase cash deposit
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jasonk
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June 19, 2011, 03:43:14 AM
 #28

Happy to say that in about 1.5 months, I've more than paid off my $1000 hardware costs.  I've earned about $500 an top of the $1000 hardware investment.

I do agree though bitcoin mining is not nearly as profitable as a few weeks ago when coins were worth $30+ and difficulty level was 500K.

Like my post?  Consider giving me a tip! =)

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beeph
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June 19, 2011, 03:44:24 AM
 #29

Wow...starting multiple threads stating the same crap now.

Everyone, read all posts related to this troll before forming opinions.

I notice on here that people voicing non-majority opinions are now all 'trolls'

Swishercutter
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June 19, 2011, 03:47:18 AM
 #30

Wow...starting multiple threads stating the same crap now.

Everyone, read all posts related to this troll before forming opinions.

I notice on here that people voicing non-majority opinions are now all 'trolls'


No...restating the obvious that has been posted in the sticky for months multiple times in multiple threads...that defines troll...making only negative comments without any new information...that defines troll.

Having a 5 day account and only posting things that discredit bitcoin/mtgox/client software...that points to obvious troll.

There is a pattern.  BTW, beeph you sold that hardware yet...people are offering right?
beeph
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June 19, 2011, 03:51:29 AM
 #31

Wow...starting multiple threads stating the same crap now.

Everyone, read all posts related to this troll before forming opinions.

I notice on here that people voicing non-majority opinions are now all 'trolls'


No...restating the obvious that has been posted in the sticky for months multiple times in multiple threads...that defines troll...making only negative comments without any new information...that defines troll.

Having a 5 day account and only posting things that discredit bitcoin/mtgox/client software...that points to obvious troll.

There is a pattern.  BTW, beeph you sold that hardware yet...people are offering right?

so am I a troll now? for selling mining hardware on a mining forum? lol
get a life dude.. most people just got into this when they read the recent news blitz, thats why the accoutns are new, because they're NEWBIES.  its not because they live to destroy bitcoins or whatever fantasies u've cooked up.  And 90% of people (especially 35+) dont read all the articles and crap.. if people are repeating the same threads it might be, i dont know.. cuz its happening to lots of people and maybe its TRUE?  i mean where there's smoke...

Most people on the bitcoin forums are FANS of bitcoins, and if they're griping about mining like I am, its because the calculators were misleading and they got in over their head.  It's a complicated system, to say the least.


Hook^
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June 19, 2011, 03:52:14 AM
 #32

Having a 5 day account and only posting things that discredit bitcoin/mtgox/client software...that points to obvious troll.

You seem to not listen. I have already explained this umpteen times, but I will try again:

I have never discredited bitcoin.  I think it is a great investment.  I only discredit dedicated mining for now.
Mt. Gox has a simple incompatability with IE 8, which I explained.  Other than that, I have had no problem with Mt. Gox.
The client software, I have no idea about.

Swishercutter
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June 19, 2011, 03:54:58 AM
 #33

Having a 5 day account and only posting things that discredit bitcoin/mtgox/client software...that points to obvious troll.

You seem to not listen. I have already explained this umpteen times, but I will try again:

I have never discredited bitcoin.  I think it is a great investment.  I only discredit dedicated mining for now.
Mt. Gox has a simple incompatability with IE 8, which I explained.  Other than that, I have had no problem with Mt. Gox.
The client software, I have no idea about.



Click on your account tab...you are aware we can read all of your posts right?  Tell me which one of your posts was helpful or new to the community.  I couldn't find one.
beeph
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June 19, 2011, 03:56:37 AM
 #34

Having a 5 day account and only posting things that discredit bitcoin/mtgox/client software...that points to obvious troll.

You seem to not listen. I have already explained this umpteen times, but I will try again:

I have never discredited bitcoin.  I think it is a great investment.  I only discredit dedicated mining for now.
Mt. Gox has a simple incompatability with IE 8, which I explained.  Other than that, I have had no problem with Mt. Gox.
The client software, I have no idea about.



Click on your account tab...you are aware we can read all of your posts right?  Tell me which one of your posts was helpful or new to the community.  I couldn't find one.

so you read ALL his posts? jesus dude.. GET A LIFE.

Swishercutter
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June 19, 2011, 03:58:36 AM
 #35

Having a 5 day account and only posting things that discredit bitcoin/mtgox/client software...that points to obvious troll.

You seem to not listen. I have already explained this umpteen times, but I will try again:

I have never discredited bitcoin.  I think it is a great investment.  I only discredit dedicated mining for now.
Mt. Gox has a simple incompatability with IE 8, which I explained.  Other than that, I have had no problem with Mt. Gox.
The client software, I have no idea about.



Click on your account tab...you are aware we can read all of your posts right?  Tell me which one of your posts was helpful or new to the community.  I couldn't find one.

so you read ALL his posts? jesus dude.. GET A LIFE.


There wasn't very many when I started...and since more than one thread was started for the same thing in the same day it seems odd.

As does some noob who supposedly dumps 10k into mining only to decide that he was stupid.
beeph
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June 19, 2011, 04:00:24 AM
 #36

Having a 5 day account and only posting things that discredit bitcoin/mtgox/client software...that points to obvious troll.

You seem to not listen. I have already explained this umpteen times, but I will try again:

I have never discredited bitcoin.  I think it is a great investment.  I only discredit dedicated mining for now.
Mt. Gox has a simple incompatability with IE 8, which I explained.  Other than that, I have had no problem with Mt. Gox.
The client software, I have no idea about.



Click on your account tab...you are aware we can read all of your posts right?  Tell me which one of your posts was helpful or new to the community.  I couldn't find one.

so you read ALL his posts? jesus dude.. GET A LIFE.


There wasn't very many when I started...and since more than one thread was started for the same thing in the same day it seems odd.

As does some noob who supposedly dumps 10k into mining only to decide that he was stupid.

Actually 12,000$.... and it WAS STUPID.


Hook^
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June 19, 2011, 04:01:04 AM
 #37

Having a 5 day account and only posting things that discredit bitcoin/mtgox/client software...that points to obvious troll.

You seem to not listen. I have already explained this umpteen times, but I will try again:

I have never discredited bitcoin.  I think it is a great investment.  I only discredit dedicated mining for now.
Mt. Gox has a simple incompatability with IE 8, which I explained.  Other than that, I have had no problem with Mt. Gox.
The client software, I have no idea about.



Click on your account tab...you are aware we can read all of your posts right?  Tell me which one of your posts was helpful or new to the community.  I couldn't find one.
Saying that I have contributed nothing of value is a different argument than saying that I have discredited bitcoin/mtgox, etc.  Try to refute the original post.

As far as value, I belive if I help people understand the problem with the network growth halving their profits every 18 days, they can make a better decision on buying dedicated miners.

Also, I have commented on how bitcoins are much better than fiat currency issued by central bankers that can be inflated at will.  That is the best part of bitcoin.  Plus real banking secrecy.
MoonShadow
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June 19, 2011, 04:01:35 AM
 #38

Having a 5 day account and only posting things that discredit bitcoin/mtgox/client software...that points to obvious troll.

You seem to not listen. I have already explained this umpteen times, but I will try again:

I have never discredited bitcoin.  I think it is a great investment.  I only discredit dedicated mining for now.
Mt. Gox has a simple incompatability with IE 8, which I explained.  Other than that, I have had no problem with Mt. Gox.
The client software, I have no idea about.



Click on your account tab...you are aware we can read all of your posts right?  Tell me which one of your posts was helpful or new to the community.  I couldn't find one.

so you read ALL his posts? jesus dude.. GET A LIFE.


There wasn't very many when I started...and since more than one thread was started for the same thing in the same day it seems odd.

As does some noob who supposedly dumps 10k into mining only to decide that he was stupid.

Actually 12,000$

If I offered you $6K for your entire cluster, would you sell?

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
bcpokey
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June 19, 2011, 04:02:09 AM
 #39

Having a 5 day account and only posting things that discredit bitcoin/mtgox/client software...that points to obvious troll.

You seem to not listen. I have already explained this umpteen times, but I will try again:

I have never discredited bitcoin.  I think it is a great investment.  I only discredit dedicated mining for now.
Mt. Gox has a simple incompatability with IE 8, which I explained.  Other than that, I have had no problem with Mt. Gox.
The client software, I have no idea about.



Click on your account tab...you are aware we can read all of your posts right?  Tell me which one of your posts was helpful or new to the community.  I couldn't find one.

so you read ALL his posts? jesus dude.. GET A LIFE.


He only has 72 posts, you can skim through them all fairly quickly with a high reading rate. Or take a stastical sampling, for example, I'll take 1 at random off every page of his profile:

Quote
If you are building the PC because you were going to use it for gaming anyway, then it isn't a loss. Buying a PC only for mining is a complete loss.

Quote
For example, see this thread from someone else that has done the math:
http://forum.bitcoin.org/index.php?topic=18803.0

I'm sorry you think I am a troll for simply spreading the truth.  If you don't like what I am saying, then there is nothing I can do for you.  I am hoping to let others know what is going on.


Quote
What I am saying is that you will get a better return just buying right now.  Unless you already have a gaming machine, or are going to buy a machine for gaming as well.  Then it is just free money until the power costs more than the bitcoins.

The growth rate of difficulty has been 4% a day for the last year, so yes, mining rigs have been less profitable than just buying bitcoins for the last year.  If the network growth slows down to ~2.5% a year, then it starts making sense.  The first year of bitcoin, the growth rate was almost flat, so you could make more money mining than buying bitcoins.

Keep in mind this is only about dedicated mining rigs.  If you already have the equipment, there is nothing to lose by mining.  At least for another 60 days when it reaches electricity costs.

Quote
My spreadsheet estimates predict 60 days.  But that is at $20/bitcoin.  They may go up and extend net loss point out.  But still, it would have been better to buy bitcoins directly.

Yadda yadda. Obviously this is a poor sampling, but I'm just using it to show you can get a flavor for someones posts quickly and easily while still having "a life".
Swishercutter
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June 19, 2011, 04:03:55 AM
 #40

Having a 5 day account and only posting things that discredit bitcoin/mtgox/client software...that points to obvious troll.

You seem to not listen. I have already explained this umpteen times, but I will try again:

I have never discredited bitcoin.  I think it is a great investment.  I only discredit dedicated mining for now.
Mt. Gox has a simple incompatability with IE 8, which I explained.  Other than that, I have had no problem with Mt. Gox.
The client software, I have no idea about.



Click on your account tab...you are aware we can read all of your posts right?  Tell me which one of your posts was helpful or new to the community.  I couldn't find one.
Saying that I have contributed nothing of value is a different argument than saying that I have discredited bitcoin/mtgox, etc.  Try to refute the original post.

As far as value, I belive if I help people understand the problem with the network growth halving their profits every 18 days, they can make a better decision on buying dedicated miners.

Also, I have commented on how bitcoins are much better than fiat currency issued by central bankers that can be inflated at will.  That is the best part of bitcoin.  Plus real banking secrecy.


Again, you are not saying anything new...no need for a new discussion...this has all been well documented for months and most believe it to be inaccurate.
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