Long term bitcoin mining perspective

[yochdog]

It seems like many forum members are mentally "throwing in the towel" after the recent difficulty increases.  I am reading much bellyaching about how it makes not sense to mine anymore because profitability has dropped. 

I think this is sour grapes directed at newer miners such as myself (2 months), and not really the correct way to view mining.  When looking out more than a few weeks, mining can still be a very good investment.  Given that there are still some 14 million bitcoins yet to be created, the opportunity to have fun, make a little money, and learn something new is still great.

Just because we can't "pay off our cards" in a month does not mean its time to cry and go home.  Show me any other investment opportunity with a 100% ROI in 90 days.....they just don't exist. 

I will continue to moderately scale up my mining operations with a timeline of several years, not a few weeks.  I have not doubt I will earn enough in that time frame to cover my periodic investments. 


Tidbits:  I am running 15 6950's, a random 6870, and 2 6750's.  I average around 5000 MH/s taking into account freezes.

[yochdog]

electricity definitly factors in.....but I am lucky enough to live in the state with the second cheapest power in the country.

I would not want to be mining in California....ouch. 

[release]

Despite living in CA where the norm is 20c/kwh, i apparently get 10c/kwh.
the radeon 5xxx gets to non-profit at about 5 million difficulty (at 20c/kwh) so unless there's a huge spike in difficulty, you'll still get ROI.

[yochdog]

I will be curious to see how many people begin dropping out when the difficulty passes 2,000,000.  It could prove a boon to people that have cost advantages over other miners. 

[thehairymob]

I've only got a sigle card but still think it's worth the gamble. After all if the market does grow and prices for BTC with them then I might be able to get something for my rig in the future.

[ianspain]

where can i get info on the cost of equipment needed to mine???

[yochdog]

https://en.bitcoin.it/wiki/Mining_Hardware_Comparison

that is a start.....and figure 250-300 for a good MOBO/CPU/PSU combination if you dont have a spare PCI express slot open. 

[johnyj]

Price will go down, difficulty will rise, many will quit, it's very clear

[tman540]

You guys think that a 1000 M/hs will still be good for a while?

[johnyj]

The rising difficulty means more and more gpus are currently joining this game, each gpu get smaller and smaller amount of coin in average, only those who started quite early can get some return, the game will be over in a couple of months

[johnyj]

You guys think that a 1000 M/hs will still be good for a while?

It has nothing to do with your hash speed, no matter you are hashing at 5Gh/s or 5Mh/s, you consume equal scale of electricity, if the bitcoin generation speed dropped (due to rising difficulty) to a level that your electricity costs are higher than the coin value generated each day, then this becomes a sure lose game

[mrblu]

Basically the hope is that as difficulty increases so does bitcoin exchange rates. I think the markets are consolidating at current prices. We may get about a 100% increase in 3-4 months time which would halve your current earn rate. I would still be profitable...but only marginally so I won't be mining after that (plus I would be hitting summer towards that time as well).

[mc_lovin]

Basically the hope is that as difficulty increases so does bitcoin exchange rates. I think the markets are consolidating at current prices. We may get about a 100% increase in 3-4 months time which would halve your current earn rate. I would still be profitable...but only marginally so I won't be mining after that (plus I would be hitting summer towards that time as well).

No kidding! I started when the difficulty was 300,000 and the exchange was $41!  I bought a dozen cards and now the difficulty is 1.7 million and it's worth $14!  I hope I wake up tomorrow and it's back to $41 again.

[bizzy]

I will continue to moderately scale up my mining operations with a timeline of several years, not a few weeks.  I have not doubt I will earn enough in that time frame to cover my periodic investments. 

The current market price of Bitcoins factors in the risk that it will never make it to the mainstream, for whatever reason. By investing in equipment with a longer timeline, you expose yourself to a risk of loss for a longer period, but admittedly the risk may be decreasing over time.

[Morebitcoinsplease]

I will continue to moderately scale up my mining operations with a timeline of several years, not a few weeks.  I have not doubt I will earn enough in that time frame to cover my periodic investments.  

The current market price of Bitcoins factors in the risk that it will never make it to the mainstream, for whatever reason. By investing in equipment with a longer timeline, you expose yourself to a risk of loss for a longer period, but admittedly the risk may be decreasing over time.

Hrmm very true, I do buy a 6990 or a 5970 on ebay whenever the difficulty goes up just to keep a constant rate but thats 600 - 800 dollar investment, so say $700 investment making 750 Mhashs (Coins per 24h at these conditions: 0.446 BTC based on bitcoinx.com at current difficulty)  you need about 50 @ 14.00 Btc coins just to make back that investment which the card by itself would take over 100+ days without counting difficulty rise.

So yes unless you have already paid off your rigs investment and power consumption, its not worth continual investment as it continually expands your risk and increases the timeline on return on investment if you are in it for the money.

[Ente]

Basically the hope is that as difficulty increases so does bitcoin exchange rates. I think the markets are consolidating at current prices. We may get about a 100% increase in 3-4 months time which would halve your current earn rate. I would still be profitable...but only marginally so I won't be mining after that (plus I would be hitting summer towards that time as well).

What he says!
Most seem to forget that when difficulty rises, Bitcoins are harder (=more expensive) to mine, so the exchange rate WILL follow! Or do you really believe that right in this week, after 2 years, Bitcoin mining suddently stopped to be lucrative? Compared to today, mining was ridiculously easy some months ago. Compared to some months ago, Bitcoins are ridiculously expensive today. Realize something? :-)

In fact, it could very well be that one of the constants are that mining hardware pays off after around three months, not calculating electricity costs. This rule, if it was to be confirmed, would not be made by the protocol, but by the market itself. Self-fulfilling regulation.

It should be possible to take a) the price per hardware, b) the difficulty, c) the exchange rate beginning from 2009, and with that calculate the ROI over time. I read about those "3 months" too often by now.. I really think it will be quite steady over time..

All data is available online!

Ente

[ianspain]

https://en.bitcoin.it/wiki/Mining_Hardware_Comparison

that is a start.....and figure 250-300 for a good MOBO/CPU/PSU combination if you dont have a spare PCI express slot open. 

thanks