I hope nobody minds a quick off-topic, but out of the people that purchased pre-orders for Terrahash, are any of you still participating in the ASIC race?
A couple months ago, it became crystal clear that this particular race is not worth running anymore. While the new generations coming out now are clearly attractive, just like the ones here, it has to do with timing, and the rapid increase in difficulty. Therefore, I've determined that any ASIC based race is no longer worthwhile.
I still have a decent sized Scyrpt operation that I will continue to grow until circumstances change.
If you are still pursuing ASIC miners, my question for you is what is your end goal?
Great question!
In my case, I had no skin in the early game, because I had no way of doing it. Come about two months from now, that may no longer be true, in which case I will be in the race.
My reasons are more long term than breakeven profit, and somewhat complex. But as briefly as possible, I'll illustrate why I think 6 month positive ROI is not a big factor if you are doing this for something more than just getting more bitcoins in your wallet. (Not that that is an unworthy goal).
First off, there is the issue of making the network more secure. I won't use the phrase "securing the network" because that is impossible. Making it very difficult to take it over is important, though. The national fiat currencies, whatever your political beliefs, have from a technical standpoint been compromised beyond repair.
Which brings me to a lot of why I'm interested in this race, and where I think the ultimate value of mining lies. I want to see bitcoin become a mainstream currency. It's on the brink right now. With proper promotion, or sufficient improper promotion, it will happen soon, or this will have been an interesting and expensive experiment.
I think that most miners don't look at the actual value of transaction fees. That little fraction of a bitcoin that accompanies every transaction, should it go mainstream, will be A LOT of money in a short time. Banks, when they aren't buying governments, run very small margins on most of their transactions. Yet they have always profited handsomely. Prior to massive regulation, the most honest profited very handsomely. Fractional reserve and central regulation destroyed that model (see Greshams law), but the historical fact of it remains.
Bitcoin, by contrast to standard fiat, has no central issuing authority. This is, in my arrogant opinion, it's biggest strength. The bigger the network, the more this becomes a strength. Thus the long term money is in microtransactions AND general acceptance of bitcoin.
Further, if I am generating enough bitcoins with my machines to fund other ventures not related to mining, I can leverage that over a long period to gain financially and on other, perhaps non economic goals. If it cost me more than I make (excluding ROI on equipment, I'm talking operating costs) then it's a losing proposition, but that is an unlikely scenario for a long period of time.
As a general strategy, it is my thought that one could leverage the mining to buy newer, cheaper, and more efficient equipment, first, and then to start building off grid power systems to offset the eventuality of electricity costs overriding profit to much. As part of this strategy, I would be promoting bitcoin as a transactional instrument for practically everything. There are some hurdles to overcome with that, but the biggest one is simply popularity. Use your coins to purchase goods and services, and particularly, advertising. Promote the fuck out of the concept, make it so people at large cannot escape noticing bitcoin, and in the long term mining of coins will become almost irrelevant and definitely secondary to transactional fees and general commerce.
So I think the race is worth it in the short term to be prepared for the longterm. As mining profits decrease, it does not stop the machines from functioning, and those fees transfer in every block. There will come a time, if the concept that Satoshi set out in his paper comes to pass, when the measly block reward simply will be a bonus. For me, the short term race is interesting, exciting, and risky. But the real rewards, for all concerned, are in the long term.
