Bitcoin Forum
December 09, 2016, 05:47:46 PM *
News: Latest stable version of Bitcoin Core: 0.13.1  [Torrent].
 
   Home   Help Search Donate Login Register  
Poll
Question: If you had $10,000 to invest, would you buy mining equipment or bitcoins?  (Voting closed: June 30, 2013, 08:01:51 PM)
Mining Equipment is a better long term investment - 11 (14.3%)
Bitcoins are a better long term investment - 36 (46.8%)
I would go half and half. - 17 (22.1%)
Neither one is a very good investment currently. - 13 (16.9%)
Total Voters: 77

Pages: [1]
  Print  
Author Topic: What's a better investment currently. Bitcoins or Mining Equipment?  (Read 1483 times)
bitrebel
Sr. Member
****
Offline Offline

Activity: 364


View Profile
July 31, 2011, 08:01:51 PM
 #1

How many people here would put thousands of dollars into mining equipment vs bitcoins?

If you think bitcoins will rise in value, both are good investments, but I would like to hear the debate between the 2 separate camps.

Why does Bitrebel have 65+ Ignores?
Because Bitrebel says things that some people do not want YOU to hear.
1481305666
Hero Member
*
Offline Offline

Posts: 1481305666

View Profile Personal Message (Offline)

Ignore
1481305666
Reply with quote  #2

1481305666
Report to moderator
1481305666
Hero Member
*
Offline Offline

Posts: 1481305666

View Profile Personal Message (Offline)

Ignore
1481305666
Reply with quote  #2

1481305666
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1481305666
Hero Member
*
Offline Offline

Posts: 1481305666

View Profile Personal Message (Offline)

Ignore
1481305666
Reply with quote  #2

1481305666
Report to moderator
1481305666
Hero Member
*
Offline Offline

Posts: 1481305666

View Profile Personal Message (Offline)

Ignore
1481305666
Reply with quote  #2

1481305666
Report to moderator
Steve
Hero Member
*****
Offline Offline

Activity: 868



View Profile WWW
July 31, 2011, 08:15:06 PM
 #2

How many people here would put thousands of dollars into mining equipment vs bitcoins?

If you think bitcoins will rise in value, both are good investments, but I would like to hear the debate between the 2 separate camps.

It's not really a good question.  The choice comes down to what you think the price of bitcoins is likely to do and what your risk tolerance is (one question is pure speculation and the other very individual).  Mining is lower risk because your capital equipment has resale value, but the profitability of mining (particularly right now) is pretty low.  Buying bitcoin outright carries a far higher risk.  If you think the price of bitcoin is going to rise quickly in the near term and you can tolerate the risk, you're better off just buying bitcoins.  If you think the price is going to hold steady or rise moderately for a long while, you may be better off mining.  If you think the price is going to steadily decline, don't buy or mine (unless you can buy some mining hardware on the cheap due to other selling out).  If you think the price is about to collapse, sell all your bitcoins and mining equipment fast!

When you do the calculations for mining, make sure you're doing your accounting as if you sell every last bitcoin mined as it is mined (even if you intend to keep some or all of your mined bitcons).  The reason is that when you hold them, you are now investing directly in bitcoin and speculating on the future value.  You don't need mining equipment for that, you could more easily just buy the bitcoins you would have mined.

(gasteve on IRC) Does your website accept cash? https://bitpay.com
jackjack
Hero Member
*****
Offline Offline

Activity: 882


May Bitcoin be touched by his Noodly Appendage


View Profile
July 31, 2011, 08:17:16 PM
 #3

How many people here would put thousands of dollars into mining equipment vs bitcoins?

If you think bitcoins will rise in value, both are good investments, but I would like to hear the debate between the 2 separate camps.

It's not really a good question.  The choice comes down to what you think the price of bitcoins is likely to do and what your risk tolerance is (one question is pure speculation and the other very individual).  Mining is lower risk because your capital equipment has resale value, but the profitability of mining (particularly right now) is pretty low.  Buying bitcoin outright carries a far higher risk.  If you think the price of bitcoin is going to rise quickly in the near term and you can tolerate the risk, you're better off just buying bitcoins.  If you think the price is going to hold steady or rise moderately for a long while, you may be better off mining.  If you think the price is going to steadily decline, don't buy or mine (unless you can buy some mining hardware on the cheap due to other selling out).  If you think the price is about to collapse, sell all your bitcoins and mining equipment fast!

When you do the calculations for mining, make sure you're doing your accounting as if you sell every last bitcoin mined as it is mined (even if you intend to keep some or all of your mined bitcons).  The reason is that when you hold them, you are now investing directly in bitcoin and speculating on the future value.  You don't need mining equipment for that, you could more easily just buy the bitcoins you would have mined.
This

Own address: 19QkqAza7BHFTuoz9N8UQkryP4E9jHo4N3 - Pywallet support: 1AQDfx22pKGgXnUZFL1e4UKos3QqvRzNh5 - Bitcointalk++ script support: 1Pxeccscj1ygseTdSV1qUqQCanp2B2NMM2
Pywallet: instructions. Encrypted wallet support, export/import keys/addresses, backup wallets, export/import CSV data from/into wallet, merge wallets, delete/import addresses and transactions, recover altcoins sent to bitcoin addresses, sign/verify messages and files with Bitcoin addresses, recover deleted wallets, etc.
Meatpile
Sr. Member
****
Offline Offline

Activity: 277


View Profile
August 01, 2011, 01:58:29 AM
 #4

Don't invest at all.

If you think bitcoins are neat, more useful than current money, or opens the gate for worldwide electronic money then what the hell buy some and spend it on things.

If you are looking to make money off other speculators, then they are expecting the same from you... So any advice you would receive here would be the opposite of what you want to hear.

grod
Full Member
***
Offline Offline

Activity: 154


View Profile
August 01, 2011, 02:16:50 AM
 #5

Being a contrarian I'd say mining is higher risk and also higher potential reward.  If you spend the money on bitcoins instead of mining equipment you'll get as many *today* as you would typically mine with that equipment over 6 months, assuming a steady 8-10% difficulty increase every 10 days.  In addition to fluctuating valuation you risk a release of ASIC miners to the general public during those 6 months, and 7 series making your current hardware both obsolete and worthless - good luck selling your 5830s to recoup your investment when 6870s drop from $155 AR to low $100s after the 7 series midrange hits.  You are one price spike away from a quadrupling in difficulty and NEVER mining as many BTC as you could have bought today.  Having all the bitcoins upfront leaves you more liquid, with more options during the entire time.

However, since rising difficulty makes bitcoins harder and more expensive to obtain by mining thusly making purchase the only intelligent option for anyone bullish on bitcoins, my wallet advises you to invest in mining hardware.
tvbcof
Legendary
*
Online Online

Activity: 1988


View Profile
August 01, 2011, 04:24:24 AM
 #6

I'm a relative latecomer.  Here are some reasons I decided _not_ to mine.  Fair warning:  I don't really stand behind the validity of any of them.

 - I wanted to establish a position in BTC fairly quickly, then adjust it up or down over time.

 - I did not sense that the bitcoin system needed the extra hashing power at this point in the game.

 - I expect that if I want to GPU mine, I could pick up a used rig when it became unprofitable to mine (and I have access to space in the one of the lowest cost per kilowatt/hour area of the US.)

 - I expect that if I want to GPU mine, GPU production will overshoot demand at some point, and the hardware and software may evolve to better support hashing as well.

Frankly, mining at this point offends my sense of efficiency to some extent.  There are plenty of places where electricity is used simply for the purpose of generating heat.  I am holding out for a solution like a 'Bitcoin hot water heater' and devices along those lines.

In fact, if anyone knows of such projects I'd be interested to hear of them.  I skimmed a few pages of the mining hardware part of the forum and only saw stuff about current methods.  Granted, there is room for improvement in my research effort.

istar
Hero Member
*****
Offline Offline

Activity: 524


View Profile
August 01, 2011, 07:42:51 AM
 #7

It depends on how much money and time you want to invest.

With mining you have to take a bigger risc in order to get bitcoins. You have to invest much more time, setting up the rig, reasearching etc.
There is the risc of things breaking or competing with a lot of new mining companies.

You also need a room that can get very hot and does not disturb you. If you dont have that, buy.

With buying you can buy for a small amount of money. Thus taking a smaller monetary risc.
Right now price for bitcoin is quite good for buying which means its not as good for mining. Though mining is still good for many.

However in the long term mining has more potential and you get good gaming hardware.

I don't think you should buy and spend.
Rather buy and hold for 1-5 years and see what happens.








Bitcoins - Because we should not pay to use our money
xcooling
Full Member
***
Offline Offline

Activity: 145


View Profile
August 01, 2011, 08:56:38 AM
 #8

mining hardware will return an average  decrease of 8% per a month, not to mention the initial capital to regenerate.

US$10 000 factoring in electricity and maintenance will take you around 120 days to recoup.

phelix
Legendary
*
Offline Offline

Activity: 1680


nmc:id/phelix


View Profile
August 01, 2011, 09:59:48 AM
 #9

mining hardware will return an average  decrease of 8% per a month, not to mention the initial capital to regenerate.

US$10 000 factoring in electricity and maintenance will take you around 120 days to recoup.
mining takes a lot of time and effort. if you factor that in it is more efficient to buy.

blockchained.com ■ bitcointalk top posts
airdata
Sr. Member
****
Offline Offline

Activity: 406


View Profile
August 01, 2011, 01:12:46 PM
 #10

mining hardware will return an average  decrease of 8% per a month, not to mention the initial capital to regenerate.

US$10 000 factoring in electricity and maintenance will take you around 120 days to recoup.

Nice post.

I'd like to assume 60% or more resale value on all mining gear.  If I sold the $2000 worth of stuff today, I could likely get 1600-1800 easily.
xcooling
Full Member
***
Offline Offline

Activity: 145


View Profile
August 01, 2011, 02:11:58 PM
 #11

don't count on recouping the hardware costs.

if the bitcoin market crashes, gpus will flood the market, supply will outweigh demand, causing used gpu prices to drop a further 50%.

IT equipment devalues 40% every 180 days.

And one other minor point.. risk of hardware failure and fire.

xcooling
Full Member
***
Offline Offline

Activity: 145


View Profile
August 01, 2011, 02:16:26 PM
 #12

You need to do the math and decide what investment suites your personal risk profile.

An idea would be to diversify your portfolio to minimize risk and exposure.

Ie. 20% in resources (gold, coal, oil, etc), 20% in bitcoin, 20% in a 30 day call account/unit trusts, 20% stocks, 20% retirement annuity (*401k).

Pages: [1]
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!