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Author Topic: No mining hardware is worth buying  (Read 14844 times)
murraypaul
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October 13, 2013, 05:04:02 PM
 #21

This is not true. After the last difficulty update a week ago CEX.IO price for GHs hardly blinked, it stabilized very quickly at around the same level as before the difficulty update. Why? Because you keep forgetting you are not renting GHs the owner can opt you out on his will, you are buying GHs which you can sell at your will and regain the majority off the profit from that sale, not only from mining.

But if it is overpriced for the amount of Bitcoin it can generate, why would you be able to resell it for that overpriced figure?

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October 13, 2013, 05:38:48 PM
 #22

This is not true. After the last difficulty update a week ago CEX.IO price for GHs hardly blinked, it stabilized very quickly at around the same level as before the difficulty update. Why? Because you keep forgetting you are not renting GHs the owner can opt you out on his will, you are buying GHs which you can sell at your will and regain the majority off the profit from that sale, not only from mining.

But if it is overpriced for the amount of Bitcoin it can generate, why would you be able to resell it for that overpriced figure?

Because people are buying them at this very moment at the current price some consider overpriced, having their own views on how the network rate will behave and other factors. KnC is lagging heavily with their delivery, HashFast may be a week late, and considering the miners get half their mining revenue in their first five weeks of mining during 30% difficulty increase, they calculate that GHs bought on exchange will mine more than someone expects. Hell, people are even buying 2.7GHs USB miners for 0.9BTC, how crazy is that? And they can't even make enough of them for the interested buyers. Those miners will not return the third of their price in the same mining calculations, so the only price that can define the real GHs value is market (exchange) price. And cex.io is giving you exactly that.
Pokerfan
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October 13, 2013, 05:40:34 PM
 #23

Mining hardware is worth buying, you just need to stop thinking about profits and think how to protect the bitcoin network!
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October 13, 2013, 06:33:36 PM
 #24

I got out of mining in May and devoted the free time to building web sites. Let me tell you, I've made a lot more money off the web sites than I ever did on mining. The income/expense ratio is much better.

The entrepreneurial spirit is great to have but Bitcoins are becoming a black hole of expense now. It's just as it always has been, the earlier you get in the more you make and now there is very little meat left on the bone.
DyslexicZombei
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October 13, 2013, 08:38:00 PM
 #25

Have actually checked Cex.io also. They do have decent gigash/$ prices but you'd still lose. Not as much as pre-ordering some November 500giga ASICs, but you'd still lose nonetheless.

Just enter all the numbers here http://www.coinish.com/calc/# in expert mode. At 0.1850/gigahash, you'd still make a loss even with zero electricity costs. Price of hashrate is going down so in 12 months time what now costs 0.18xbt might be worthless so resell value is also questionable, though I have to say seems better deal than buying ASICs and have them delivered to your home.

cex.io beats every preorder because you get GHs mining for you *now*, which is the most important thing when you look at constant difficulty increases before you get your preorder delivered. Another thing going in cex.io favor is that you can easily sell GHs and get the most cost of it back, which may not be true for in-hand hardware.

How's that working out for you guys? I'm curious about this but haven't been curious enough to dabble in Bitfury specific GH trading/instant buying.

What are the price premiums like compared to pre-order deals?  Thanks in advance!

==

BTW, I specialize in helping out the little guys and newbies. I'm not here to help people that can buy top of the line miners by themselves or people just holding BTC; just the ones that still want to buy portions of ASIC hardware at the cheapest possible prices. Some people still want to protect the BTC network, even if they take a slight loss or ROI isn't certain, and I hope to give them a scam free/high value sales outlet to at least explore mining at fractional risk.

If someone only has $70 to spend on ASIC hardware, I'd like to think that if they're dead set on trying out mining, my at-cost (and sometimes below-cost) GB shares are going to give them much more equivalent hashrate (+ UPS backup) then the equivalent number of USB thumbs...as long as they have the patience to wait a little while.

I hold BTC myself but it's a bit boring, so I do allocate a big chunk of my BTC investments into what I see are the strongest ASIC pre-order deals across the industry, at the best values I can get for our Democratic at-cost Miners Cooperative.
dragonkid
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October 13, 2013, 08:45:45 PM
 #26

I think if you like to take risk, there are still mining hardware worth buying.

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October 13, 2013, 10:28:25 PM
 #27

By any reasonable expectation of the short term difficulty increases cex.io is still overpriced. We're about 3 days out from a 40% difficulty increase. If you say that the next few increases after that are 30%, the correct price for a GH *right now* is about 0.097BTC, i.e., about half of cex.io's prices.

Getting it now doesn't save it as an investment.

This is not true. After the last difficulty update a week ago CEX.IO price for GHs hardly blinked, it stabilized very quickly at around the same level as before the difficulty update. Why? Because you keep forgetting you are not renting GHs the owner can opt you out on his will, you are buying GHs which you can sell at your will and regain the majority off the profit from that sale, not only from mining. If you would rent mining rights that would be another story, like you described, but that is not the case. Your GHs are mining for you even when you issue a sale order and your account shows 0 GHs in your possession, all the way until somebody accepts your sell order.

So it's just buying an overpriced asset and finding a bagholder? OK, good luck with that. I think I'll pass.

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October 13, 2013, 10:48:51 PM
 #28

Have actually checked Cex.io also. They do have decent gigash/$ prices but you'd still lose. Not as much as pre-ordering some November 500giga ASICs, but you'd still lose nonetheless.

Just enter all the numbers here http://www.coinish.com/calc/# in expert mode. At 0.1850/gigahash, you'd still make a loss even with zero electricity costs. Price of hashrate is going down so in 12 months time what now costs 0.18xbt might be worthless so resell value is also questionable, though I have to say seems better deal than buying ASICs and have them delivered to your home.

cex.io beats every preorder because you get GHs mining for you *now*, which is the most important thing when you look at constant difficulty increases before you get your preorder delivered. Another thing going in cex.io favor is that you can easily sell GHs and get the most cost of it back, which may not be true for in-hand hardware.

How's that working out for you guys? I'm curious about this but haven't been curious enough to dabble in Bitfury specific GH trading/instant buying.

What are the price premiums like compared to pre-order deals?  Thanks in advance!

==

BTW, I specialize in helping out the little guys and newbies. I'm not here to help people that can buy top of the line miners by themselves or people just holding BTC; just the ones that still want to buy portions of ASIC hardware at the cheapest possible prices. Some people still want to protect the BTC network, even if they take a slight loss or ROI isn't certain, and I hope to give them a scam free/high value sales outlet to at least explore mining at fractional risk.

If someone only has $70 to spend on ASIC hardware, I'd like to think that if they're dead set on trying out mining, my at-cost (and sometimes below-cost) GB shares are going to give them much more equivalent hashrate (+ UPS backup) then the equivalent number of USB thumbs...as long as they have the patience to wait a little while.

I hold BTC myself but it's a bit boring, so I do allocate a big chunk of my BTC investments into what I see are the strongest ASIC pre-order deals across the industry, at the best values I can get for our Democratic at-cost Miners Cooperative.

I've being following what you are doing and appreciate it, though I'm still not in your Cooperative. If you consider group buying cex.io GHs for your Miners Cooperative, I suggest that you delegate someone who has experience with exchanges to handle this part for you. It's not rocket science, but it ain't exactly easy. You can't just buy GHs and wait for months, you have to be active, if not constantly than daily on the exchange. Would hate to see you organize something in good will and get burned.
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October 13, 2013, 10:54:14 PM
 #29

By any reasonable expectation of the short term difficulty increases cex.io is still overpriced. We're about 3 days out from a 40% difficulty increase. If you say that the next few increases after that are 30%, the correct price for a GH *right now* is about 0.097BTC, i.e., about half of cex.io's prices.

Getting it now doesn't save it as an investment.

This is not true. After the last difficulty update a week ago CEX.IO price for GHs hardly blinked, it stabilized very quickly at around the same level as before the difficulty update. Why? Because you keep forgetting you are not renting GHs the owner can opt you out on his will, you are buying GHs which you can sell at your will and regain the majority off the profit from that sale, not only from mining. If you would rent mining rights that would be another story, like you described, but that is not the case. Your GHs are mining for you even when you issue a sale order and your account shows 0 GHs in your possession, all the way until somebody accepts your sell order.

So it's just buying an overpriced asset and finding a bagholder? OK, good luck with that. I think I'll pass.

It's not like that at all. Consider that, for instance, production price of gold is around 15% of it's current market value. Is buying/selling gold "buying an overpriced asset and finding a bagholder" like you described it? I'm just saying that nothing can fix the price of the asset except the market/exchange. Everything else is false economy and bad speculations.
Oldgamer
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October 13, 2013, 10:54:57 PM
 #30

I got out of mining in May and devoted the free time to building web sites. Let me tell you, I've made a lot more money off the web sites than I ever did on mining. The income/expense ratio is much better.

The entrepreneurial spirit is great to have but Bitcoins are becoming a black hole of expense now. It's just as it always has been, the earlier you get in the more you make and now there is very little meat left on the bone.

Did bot build web sites for you when you been slipping?
Oh, sorry, you did web sites yourself in your "free time"...
Yeah, I heard some people work as doctors and attorneys when they have the "free time", and some people work as engineers (sure, when they have the "free time"). Cool, right?

stripykitteh
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October 13, 2013, 11:38:47 PM
 #31

It's not like that at all. Consider that, for instance, production price of gold is around 15% of it's current market value. Is buying/selling gold "buying an overpriced asset and finding a bagholder" like you described it? I'm just saying that nothing can fix the price of the asset except the market/exchange. Everything else is false economy and bad speculations.


Your comparison with gold is false.

Gold doesn't produce an income stream; a mining asset does. Unlike gold, if I buy a miner I know its value is falling to zero in the near future. It's just a question of what income it will produce before it does.

To profit from cex.io you have to trade out of a position before the inevitable market correction. As soon as the market corrects, you are not only underwater in your fundamental position (i.e., intrinsic value, what income would I get if I held this down to 0), as soon as you liquidate you crystallize your loss.

It's a truly horrible investment.

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October 13, 2013, 11:51:12 PM
 #32

It's true that if say price of XBT doubles or triples, currently unprofitable mining operations can suddenly become profitable.

This is a fallacy. If you buy a 1 BTC miner and it will make you 0.8 BTC over it's lifetime, your profit is -0.2 BTC. If you buy 1 BTC now, your profit is 0 BTC. Future cryptocoin value doesn't affect your calculation of whether to buy mining hardware or buy the currency itself, only the calculation of if the hardware will earn you more in a reasonable time than it costs.

If you are in possession of hardware, it may have some resale value that could help you get back into the black, but if it becomes obsolete, a mere fraction of it's original price should be expected. Look at resale of BFL FPGA singles, the first dedicated mining-only hardware: https://bitcointalk.org/index.php?topic=305242.0 or http://www.ebay.com/itm/141079903811

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October 14, 2013, 12:36:42 AM
 #33

It's true that if say price of XBT doubles or triples, currently unprofitable mining operations can suddenly become profitable.

This is a fallacy. If you buy a 1 BTC miner and it will make you 0.8 BTC over it's lifetime, your profit is -0.2 BTC.

Of course not everyone buys miners with BTC.

If you buy a $1000 miner with dollars, and mine 10 BTC @ $110 each, sell them, pay your fees, electricit etc then you break even, if you mine 10 BTC @ 150 each then you make $500 or so more.

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October 14, 2013, 01:56:29 AM
 #34

 Smiley yeah I have to agree with No mining hardware is worth buying
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October 14, 2013, 02:03:19 AM
 #35

cex is the best way to mine quickly. But some decentralization advocates won't love this concept. They'd better buy off equipments and mine at home to raise more decentralized mining population.

Ajinomoto
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October 14, 2013, 02:06:46 AM
 #36

It's true that if say price of XBT doubles or triples, currently unprofitable mining operations can suddenly become profitable.

This is a fallacy. If you buy a 1 BTC miner and it will make you 0.8 BTC over it's lifetime, your profit is -0.2 BTC.

Of course not everyone buys miners with BTC.

If you buy a $1000 miner with dollars, and mine 10 BTC @ $110 each, sell them, pay your fees, electricit etc then you break even, if you mine 10 BTC @ 150 each then you make $500 or so more.

Your example is wrong, let me help you.

Right now you can buy 1 BTC @ $100 or you can buy a $1000 miner, and mine 8 BTC @ $130 each, sell them, pay your fees, electricity etc then you break even, if you mine 10 BTC @ 200 each then you make $600 or so more.

If you buy 10 BTC instead, you will profit $300 and $1000 respectively when the price of BTC hit $130 and $200.

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October 14, 2013, 02:09:53 AM
 #37

It's not like that at all. Consider that, for instance, production price of gold is around 15% of it's current market value. Is buying/selling gold "buying an overpriced asset and finding a bagholder" like you described it? I'm just saying that nothing can fix the price of the asset except the market/exchange. Everything else is false economy and bad speculations.


Your comparison with gold is false.

Gold doesn't produce an income stream; a mining asset does. Unlike gold, if I buy a miner I know its value is falling to zero in the near future. It's just a question of what income it will produce before it does.

To profit from cex.io you have to trade out of a position before the inevitable market correction. As soon as the market corrects, you are not only underwater in your fundamental position (i.e., intrinsic value, what income would I get if I held this down to 0), as soon as you liquidate you crystallize your loss.

It's a truly horrible investment.

You forget that, cex.io also gives you dividend. Price is more important in this sense that if its cheap enough, the dividend should be able to ROI over the lifetime.

stripykitteh
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October 14, 2013, 02:39:06 AM
 #38

It's not like that at all. Consider that, for instance, production price of gold is around 15% of it's current market value. Is buying/selling gold "buying an overpriced asset and finding a bagholder" like you described it? I'm just saying that nothing can fix the price of the asset except the market/exchange. Everything else is false economy and bad speculations.


Your comparison with gold is false.

Gold doesn't produce an income stream; a mining asset does. Unlike gold, if I buy a miner I know its value is falling to zero in the near future. It's just a question of what income it will produce before it does.

To profit from cex.io you have to trade out of a position before the inevitable market correction. As soon as the market corrects, you are not only underwater in your fundamental position (i.e., intrinsic value, what income would I get if I held this down to 0), as soon as you liquidate you crystallize your loss.

It's a truly horrible investment.

You forget that, cex.io also gives you dividend. Price is more important in this sense that if its cheap enough, the dividend should be able to ROI over the lifetime.

Thanks friend, I hadn't forgot about the dividend. My whole point is that the asset is currently massively overpriced for the likely dividends it will return. If we were in an era where 20% difficulty increases were the norm, the price would be fair. But we're not, we're in the dawn of the 28nm era, difficulty is rocketing up, which is why it's a terrible investment.

But it's your BTC, go ahead and buy at these prices and we'll talk in 6 weeks.

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October 14, 2013, 03:23:04 AM
 #39

It's true that if say price of XBT doubles or triples, currently unprofitable mining operations can suddenly become profitable.

This is a fallacy. If you buy a 1 BTC miner and it will make you 0.8 BTC over it's lifetime, your profit is -0.2 BTC.

Of course not everyone buys miners with BTC.

If you buy a $1000 miner with dollars, and mine 10 BTC @ $110 each, sell them, pay your fees, electricit etc then you break even, if you mine 10 BTC @ 150 each then you make $500 or so more.

Your example is wrong, let me help you.

Right now you can buy 1 BTC @ $100 or you can buy a $1000 miner, and mine 8 BTC @ $130 each, sell them, pay your fees, electricity etc then you break even, if you mine 10 BTC @ 200 each then you make $600 or so more.

If you buy 10 BTC instead, you will profit $300 and $1000 respectively when the price of BTC hit $130 and $200.

My example isn't wrong, I'm not talking about buying BTC and selling it, I'm disagreeing with the statement that you don't earn a profit if the price of BTC goes up. You can't earn a profit in BTC if the price goes up IF you paid for your miner in BTC, but if you payed cash for you miner and you sold your BTC at a price that earned you more than you spent on the miner then you are quids in.

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October 14, 2013, 10:31:54 AM
 #40

It's not like that at all. Consider that, for instance, production price of gold is around 15% of it's current market value. Is buying/selling gold "buying an overpriced asset and finding a bagholder" like you described it? I'm just saying that nothing can fix the price of the asset except the market/exchange. Everything else is false economy and bad speculations.
Your comparison with gold is false.

Gold doesn't produce an income stream; a mining asset does. Unlike gold, if I buy a miner I know its value is falling to zero in the near future. It's just a question of what income it will produce before it does.

So gold doesn't have an income stream, cex.io has, and that's bad for cex.io? What gives you the idea that cex.io GHs value is falling to zero in the near future? It's nonsense, Bitfury is energy efficient chip and their mining farm is at the place with extremely cheap electricity, so GHs you bought on the exchange may very easily still mine while most other current miners shut down.

I see that you don't like them for some reason, but please try to think over before you post such things, you are giving people biased financial advices.
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