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Author Topic: Been in bitcoin a few years, never looked at mining.  (Read 3412 times)
dominicwin
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November 24, 2013, 02:03:04 PM
 #21

So far enjoying the CEX.IO platform a lot. Nice use of some of my btc holdings and the buy sell platform is working very well. Completely painless and a way to make some extra BTC off part of my BTC holdings.


Yeah - I haven't looked back.  Gets a bit addictive as well  Undecided

It automates much of the messing about with mining, and yet still allows you to join in.

Gives me my forex type itch some relief haha.

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November 24, 2013, 03:23:26 PM
 #22

It automates much of the messing about with mining, and yet still allows you to join in.
But the messing is fun. Half the fun in mining (for me) is setting up the hardware, keeping it running, trying to overclock etc.
Mining with no hardware is just weird - I pay some BTC, hoping that the guy I paid to will later pay me more BTC.

Then again, I also run other stuff in my servers just for the fun of it (without any expectation of receiving money), so mining BTC with local hardware is great - I get to run more devices and this time I actually have a hope of at least not having to pay for the electricity (if I'm lucky I'll even get the money I paid for the device back and maybe some more).

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November 24, 2013, 07:54:09 PM
 #23

Most miners are tech guys first with no background in studying economics. Unfortunately, this means you'll need to do much of your own research in deciding whether you want to mine.

The term "ROI" is misused all. the. time.

When the value of the BTC mined exceeds the cost of equipment is the point you break even, doesn't matter if it's 1btc at $900 or 9 at $100; covering costs happens when you realize the gain or loss through trade on the exchange, or if BTC ever stabilizes you could handle all your accounting in that format. ROI happens the minute you plug it in and should be expressed as a fraction or percent value. (ROI = return/cost)

Anyone expecting 100 BTC from a machine costing $1,300 is being blind to how efficient the market is, not to mention unreasonable in expectations. Yes the delay on equipment is an opportunity cost, but the upwards trend in BTC is proof that the market is efficient in pricing. The other option would be flat pricing and no market for exchange, in that case we'd have nothing to discuss here. At all.

The cost of equipment does not drive the price of BTC up directly. The rising difficulty and need to upgrade technology are what should be known as "increasing inputs". An input is what you need to produce an output. When inputs are increasing it shifts the supply curve left, meaning it is more scarce, in this case BTC is relatively more scarce due to the rising inputs. Supply curve decreases and shifts left, this is called a shortage. Buyers are willing to bid the price up to compete in acquisition for the scarce supply available. Price meets demand at where the market determines. Nobody should care at all about how many BTC they can mine, the only thing that matters is the value of the BTC mined against other relative measures available for trade, most often cash is the measure because it puts things in the most relative terms available.

It gets a bit old hearing people say "don't mine" without much reasoning provided. Buying versus mining is a decision YOU need to make based on the information available, not some guy on a forum and what fit for him. There are many different ways to mine, different configurations come with their own unique costs. If you can source ASICs at competitive prices, and finding them might take lots of searching, but you'll be in a much different boat than someone buying on EBay for double expense. The other part is being clever with your setup and configuration, forecasting and planning ahead, etc...

I prefer mining because I enjoy learning about the equipment and it's a fun activity. Looking at a chart gets boring, been doing that with equities for almost 15 years. Being able to mine and be a part of it on a producer level is rewarding in a way. Also, by mining I'm not stuck with the psychological baggage of cost basis tied to my position. I'm mining because it's uniquely different than trading to build a position, and I honestly find it much more interesting, really all depends on what you are looking for.



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jojo69
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November 24, 2013, 10:02:41 PM
 #24

J-Dubbs,

I did not say "don't mine".  I pointed out that for some time, and I believe now, one would do better to farm fiat directly into BTC.  As far as expecting a $1300 machine to mine 100BTC, if BFL had delivered in any reasonable semblance of their repeated promises this may well have been possible.  At the time they seemed to be the most highly capitalized option.  Who was to know how deeply over their heads they really were?

I would add two points to your reasons to mine;

To secure and decentralize the network.  The more hash in disparate private hands the more resilient we are.

To acquire BTC with minimal paper trail.  Hardware manufacturers, unlike exchanges, are to date under the radar of the regulator and the tax man.  If one had...ahem...unreportable fiat, the incentive to mine, even at a lower return than might be available on the exchanges, would be greater.

This is not some pseudoeconomic post-modern Libertarian cult, it's an un-led, crowd-sourced mega startup organized around mutual self-interest where problems, whether of the theoretical or purely practical variety, are treated as temporary and, ultimately, solvable.
Censorship of e-gold was easy. Censorship of Bitcoin will be… entertaining.
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