New to Bitcoins and mining, need help

[UnknownXV]

Hi,

I'm currently saving up for a specific goal, mining bitcoins. I've seen the recent gains in bitcoin value, and I've been interested in them since I last found out about them about a year ago. I never got into mining them because it seemed a bit complicated and expensive. Recently I was perusing Butterlfylabs site, and I saw that they offer bitcoin mining contracts. I was very intrigued. This eliminates the hassle of setting up a machine yourself and the hassles thereof. It also means that, upon termination of the mining contract, I can buy a new one which will undoubtedly be at a lower cost per gh/s (given the advancement in their own technology after a year). Makes sense to me. I know they take a substantial cut, but that seems worth it.

Now what I need help with, is why this seems too good to be true. I'm no fool, at least I hope I'm not. I'm asking this so you can poke holes in my logic and identify where I'm going wrong, because this can't be true. I'm using http://www.bitcoinx.com/profit/ this calculator to assist me.

The figures:

$1,000 in mining contracts from butterlfylabs, at $10,83 per gh/s.

Given the above, that's 92 gh/s.

No electricity costs.

Difficulty of 510,929,738 at the moment.

Profitability decline per year of 0.61 (I assume this is factoring in increase in difficulty please correct me if I'm wrong).

bitcoin value at $296 USD.

With these numbers, the calculator says I will make $6,728 a year in profit. Again, this seems way too good to be true. What am I missing here? What's the catch? I know bitcoins could crash in value, but it seems like a fairly minor risk given the nature of the world's fiat currencies being inflated away.

[PrintMule]

If you are fine with such risks you might as well just buy btc directly.

[Wipeout2097]

BFL has behaved as a scam. It is dangerous to send money their direction. Ex: https://bitcointalk.org/index.php?topic=114329.0

Use this calculator: http://mining.thegenesisblock.com/

Then, if you really want to use mining contracts, check out alternatives like https://cex.io . That's about 0.105 BTC or ~$35 per Gh/s, which is damn expensive, of course. However, you earn BTC while you hold the Gh/s, and you can sell them later.

I mention this cloud mining/exchange site because I don't know of better, please investigate carefully yourself.

[g.wader]

You have to make forecast about BTC/USD rate and about difficulty increasing. That the milestones of counting. Try to use another calculator.

[st4nl3y]

the catch is that when all the companies deliver their products in upcoming months, difficulity will skyrocket and you will have to make your calculations again

[TheJohn]

Hi,

I'm currently saving up for a specific goal, mining bitcoins. I've seen the recent gains in bitcoin value, and I've been interested in them since I last found out about them about a year ago. I never got into mining them because it seemed a bit complicated and expensive. Recently I was perusing Butterlfylabs site, and I saw that they offer bitcoin mining contracts. I was very intrigued. This eliminates the hassle of setting up a machine yourself and the hassles thereof. It also means that, upon termination of the mining contract, I can buy a new one which will undoubtedly be at a lower cost per gh/s (given the advancement in their own technology after a year). Makes sense to me. I know they take a substantial cut, but that seems worth it.

Now what I need help with, is why this seems too good to be true. I'm no fool, at least I hope I'm not. I'm asking this so you can poke holes in my logic and identify where I'm going wrong, because this can't be true. I'm using http://www.bitcoinx.com/profit/ this calculator to assist me.

The figures:

$1,000 in mining contracts from butterlfylabs, at $10,83 per gh/s.

Given the above, that's 92 gh/s.

No electricity costs.

Difficulty of 510,929,738 at the moment.

Profitability decline per year of 0.61 (I assume this is factoring in increase in difficulty please correct me if I'm wrong).

bitcoin value at $296 USD.

With these numbers, the calculator says I will make $6,728 a year in profit. Again, this seems way too good to be true. What am I missing here? What's the catch? I know bitcoins could crash in value, but it seems like a fairly minor risk given the nature of the world's fiat currencies being inflated away.

Choose KNC instead of butterflylabs... do a search on butterflylabs scam and you will understand why

[toys4bitcoins]

You're definitely best off just buying BTC and holding/using them

[TheDragonSlayer]

Hi,

I'm currently saving up for a specific goal, mining bitcoins. I've seen the recent gains in bitcoin value, and I've been interested in them since I last found out about them about a year ago. I never got into mining them because it seemed a bit complicated and expensive. Recently I was perusing Butterlfylabs site, and I saw that they offer bitcoin mining contracts. I was very intrigued. This eliminates the hassle of setting up a machine yourself and the hassles thereof. It also means that, upon termination of the mining contract, I can buy a new one which will undoubtedly be at a lower cost per gh/s (given the advancement in their own technology after a year). Makes sense to me. I know they take a substantial cut, but that seems worth it.

Now what I need help with, is why this seems too good to be true. I'm no fool, at least I hope I'm not. I'm asking this so you can poke holes in my logic and identify where I'm going wrong, because this can't be true. I'm using http://www.bitcoinx.com/profit/ this calculator to assist me.

The figures:

$1,000 in mining contracts from butterlfylabs, at $10,83 per gh/s.

Given the above, that's 92 gh/s.

No electricity costs.

Difficulty of 510,929,738 at the moment.

Profitability decline per year of 0.61 (I assume this is factoring in increase in difficulty please correct me if I'm wrong).

bitcoin value at $296 USD.

With these numbers, the calculator says I will make $6,728 a year in profit. Again, this seems way too good to be true. What am I missing here? What's the catch? I know bitcoins could crash in value, but it seems like a fairly minor risk given the nature of the world's fiat currencies being inflated away.

Buy BTC is better, first the price per GH/s is too expansive, and you don't want to deal with BFL...