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Author Topic: Please stop using "ROI" when you mean Capital Recovery. it makes you sound dumb.  (Read 1078 times)
puwaha
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March 17, 2018, 04:38:58 PM
Merited by CjMapope (3), suchmoon (2), bones261 (1), sockpuppet1911 (1), flip4flop (1), KougarLOB (1), bdiddle (1)
 #1

I have a soapbox topic for today.

It's always bugged me that cryptocurrency miners have thrown around the term "ROI" (Return On Investment) as a euphemism for getting their initial capital investments in hardware purchases.  The correct term is "CR" or Capital Recovery.

When you see someone posting that they "got their ROI", or the "ROI on that GPU is 3 months", or "I've already ROIed so I'm hodling"... it makes them sound dumb.  I realize that using ROI as a stand-in for CR is probably just miner slang now, but in my opinion, words matter.  When you consider this is a forum where written words are the primary means of communicating ideas, then words matter.

Why is ROI an incorrect term?  It's incorrect because ROI is a simple mathematical formula to quantify the ratio or percentage of gains or losses based upon your capital outlay or investment.  You could have a negative ROI, but you don't really see anyone using that with the slang version of ROI used here.  They treat "ROI" as an absolute number, when the terms they really should be using are "CR" or Capital Recovery.


A simple example of ROI is this:  Miner A purchases a GPU for $1000, and over some period of time, that GPU mines $1000 worth of cryptocurrency.  Miner A did not "achieve" ROI... because the ROI is ZERO!  What did Miner A "achieve"?  They achieved a 100% "CR" or Capital Recovery.

Now, let's look at Miner B.  Miner B purchases a GPU for $1000, and over that same period of time, that GPU mines $1200 worth of cryptocurrency.  Miner B also did not "achieve" ROI.  The ROI is simply 20%.  Their "CR" or Capital Recovery is still 100%.  Both Miner A and B have "achieved" their CR, but their ROI is different.

Finally, let's look at Miner C.  Miner C purchases a GPU for $1000, and over that same period of time, that GPU mines $800 worth of cryptocurrency.  Miner C has an ROI of negative 20% (-20%), but their "CR" or Capital Recovery is still pretty good at 80%.


The above is a very simple comparison on why calculating "ROI" is not the same as CR.  There are actually several other factors to calculating ROI.  Time plays an important factor into calculating ROI, so it's never an apples-to-apples comparison unless all the same factors are considered.  In the case of physical capital like mining hardware, you also have to factor in your potential resale value if you choose to exit mining at that point in time.  It's rare to see anyone using ROI correctly, and it really has no meaning without all the proper context like time, resale value, and current coin pricing versus future coin pricing... so stop.



;TLDR
Simply put... stop using "ROI" when you mean "CR", as it makes you sound dumb.
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March 17, 2018, 04:41:06 PM
 #2

THANK YOU FOR THIS!!!  Glad I'm not the only one that it bugs the hell out of.

Ok, I want you to walk back in there and very calmly, very politely tell the risk assessors to fuck off! -Mark Baum
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March 17, 2018, 04:44:09 PM
Last edit: July 16, 2018, 12:55:21 PM by Vann
Merited by jmigdlc99 (1)
 #3

No, trying to be an internet professor is dumb.





https://bitcointalk.org/index.php?topic=1991180.0
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March 17, 2018, 04:45:10 PM
 #4

I'll continue to use ROI

Man, why this little thing botters you?
This term ROI is used a lot and will not change...

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March 17, 2018, 04:45:47 PM
 #5

Completely agree, puwaha. ROI is the wrong acronym.

Capital recovery is correct. One could also use "time to break even".

Thank you for educating the masses! Cheesy
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March 17, 2018, 04:53:31 PM
 #6

No, trying to be an internet professor is dumb.





https://bitcointalk.org/index.php?topic=1991180.0

I love Willy Wonka... but dismissing it as not important makes you ignorant.
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March 17, 2018, 04:55:49 PM
 #7

I'll continue to use ROI

And it's your free-speech right to look dumb when you do.  I hope you don't take offense to my characterization.

Quote
Man, why this little thing botters you?
This term ROI is used a lot and will not change...

In my diatribe, I mention that I realize that ROI has become "miner slang" now... but it's still wrong.  We have hundreds of new miners show up every day, and we are teaching them the incorrect terminology.
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March 17, 2018, 04:59:02 PM
 #8

No, trying to be an internet professor is dumb.





https://bitcointalk.org/index.php?topic=1991180.0

I love Willy Wonka... but dismissing it as not important makes you ignorant.

Maybe you can get together with your anally retentive 'Capital Recovery' pal for afternoon tea and cake to dscuss how ignorant we are. As if it matters or anybody cares, LOL.
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March 17, 2018, 05:14:26 PM
 #9

Maybe you can get together with your anally retentive 'Capital Recovery' pal for afternoon tea and cake to dscuss how ignorant we are. As if it matters or anybody cares, LOL.

Thanks for the suggestion.  In fact tea does sound good right now. 

If you don't care to sound ignorant, then that's your prerogative.  I think people other than yourself do care though.
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March 17, 2018, 05:22:07 PM
 #10

So, Capital Recovery limited to 100%. Means, when money-out equal to money-in it's called Capital Recovery. When money-in didn't reach 100% of money-out both term can use, Capital Recovery if we count from below (0%) and ROI if we count from above (100%), but this ROI still minus. But, if money-in more than money-out, we only can call it ROI, right?

But whatever it is, as long as we can understand each other, it is no big deal. Honestly, this is helpful.  Wink

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Vann
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March 17, 2018, 05:28:04 PM
Merited by BitBustah (25)
 #11

Maybe you can get together with your anally retentive 'Capital Recovery' pal for afternoon tea and cake to dscuss how ignorant we are. As if it matters or anybody cares, LOL.

Thanks for the suggestion.  In fact tea does sound good right now.  

If you don't care to sound ignorant, then that's your prerogative.  I think people other than yourself do care though.

While you're at it, you can discuss the other idioms and vernacular applied in a colloquial setting. YAY!
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March 17, 2018, 05:29:52 PM
 #12

So, Capital Recovery limited to 100%. Means, when money-out equal to money-in it's called Capital Recovery. When money-in didn't reach 100% of money-out both term can use, Capital Recovery if we count from below (0%) and ROI if we count from above (100%), but this ROI still minus. But, if money-in more than money-out, we only can call it ROI, right?

But whatever it is, as long as we can understand each other, it is no big deal. Honestly, this is helpful.  Wink

You can achieve a greater than 100% CR.  My examples were to illustrate that you can have a negative ROI.  What I didn't give an example on, is that it's impossible to have a negative CR.  Obviously, the goal of many people is to achieve a minimum of 100% CR.  What I take offense on is people claiming they need 100% ROI to break even... when that would actually doubling their money.  What they meant was they are trying to achieve a ZERO ROI... which is dumb... it even sounds dumb when you say it out loud.
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March 17, 2018, 05:33:09 PM
 #13

I used ROI many times ... So call me dumb. Don't care.
ROI ROI ROI ROI ROI.
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March 17, 2018, 05:33:46 PM
 #14

Maybe you can get together with your anally retentive 'Capital Recovery' pal for afternoon tea and cake to dscuss how ignorant we are. As if it matters or anybody cares, LOL.

Thanks for the suggestion.  In fact tea does sound good right now.  

If you don't care to sound ignorant, then that's your prerogative.  I think people other than yourself do care though.

While you're at it, you can discuss the other idioms and vernacular applied in a colloquial setting. YAY!

I don't think that educating yourself on the words you choose to use is a fruitless endeavor.  Slang has it's uses, but maybe I'm just getting old and cranky.
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March 17, 2018, 05:35:22 PM
 #15

Maybe you can get together with your anally retentive 'Capital Recovery' pal for afternoon tea and cake to dscuss how ignorant we are. As if it matters or anybody cares, LOL.

+25 merit. Love the attitude. Smiley
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March 17, 2018, 05:40:06 PM
 #16

Maybe you can get together with your anally retentive 'Capital Recovery' pal for afternoon tea and cake to dscuss how ignorant we are. As if it matters or anybody cares, LOL.

+25 merit. Love the attitude. Smiley

If I had any merit to give away anymore I would do the same, just for putting that song from Willy Wonka and the Chocolate Factory called "Pure Imagination" running though my head.

Thanks Vann!
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March 17, 2018, 05:41:46 PM
Merited by BitBustah (5)
 #17

I have a soapbox topic for today.
....
;TLDR
Simply put... stop using "ROI" when you mean "CR", as it makes you sound dumb.

Approved.
Someone give this man a cookie.  He is President of the Forum for the day.

1ER7JwEjpjQfm4qaTxy6EaNdNy8MqzP1pt  Smiley
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March 17, 2018, 05:42:49 PM
 #18

Maybe you can get together with your anally retentive 'Capital Recovery' pal for afternoon tea and cake to dscuss how ignorant we are. As if it matters or anybody cares, LOL.

+25 merit. Love the attitude. Smiley

If I had any merit to give away anymore I would do the same, just for putting that song from Willy Wonka and the Chocolate Factory called "Pure Imagination" running though my head.

Thanks Vann!


See how ROI can make you smile there?  Smiley


Anyway, putting aside the playfulness.. Kinda weird that you get fed up by people using the wrong terms/words for something.
If I were to react like that to every mistake/error I see IRL or online.. It would make me sour in the end.
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March 17, 2018, 05:43:24 PM
Merited by BitBustah (5)
 #19

I'll continue to use ROI

And it's your free-speech right to look dumb when you do.  I hope you don't take offense to my characterization.

Quote
Man, why this little thing botters you?
This term ROI is used a lot and will not change...

In my diatribe, I mention that I realize that ROI has become "miner slang" now... but it's still wrong.  We have hundreds of new miners show up every day, and we are teaching them the incorrect terminology.

Whats next, are you going to tell HODLers they are spelling HOLD wrong?  Get the hell off the internet if you can't handle the stupid shit here in.
puwaha
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March 17, 2018, 05:43:37 PM
 #20

I have a soapbox topic for today.
....
;TLDR
Simply put... stop using "ROI" when you mean "CR", as it makes you sound dumb.

Approved.
Someone give this man a cookie.  He is President of the Forum for the day.

Anything has got to be better than all the doom and gloom threads about Cryptonite ASICs, low mining profits, and where do I begin questions.
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