Why do I keep hearing mining is unprofitable?

[Ardenyham]

This is one more thing I don't get. I also read about it in group buys. They say: "when our group miners are no longer profitable we sell them and share the money". But who is going to buy non-profitable miners?

Here ya go.  People are always buying non-profitable miners... I have no idea why.

If you buy with USD you have hope you make profit if Bitcoin price rise. And it seems it is hard to understand how the difficulty works and how quickly you can mine much less / day

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[Fear_in_Cube]

Mining kinda works if the difficulty rises slowly (yeah right) and the exchange rate goes up a couple hundreds more. Other than that you're looking at a losing proposition, especially when you're using over a certain electricity consumption bracket, you're paying 2x more in your electricity bill.

[Hap3niz]

makes me wanna move into an all bills paid apartment and use up all the energy! lol

[Damnsammit]

makes me wanna move into an all bills paid apartment and use up all the energy! lol

I think that's the wrong way to look at it...

If you already have the equipment, you should be mining with it... if you have the money to buy the equipment, then you should probably just buy the Bitcoins.

 

[nahtnam]

My question is why

What is affecting the reality of bitoin mining and is not taken into account in the calculator I referenced?

The difficulty rises. The next rise is in 6 days.

[dzarmush]

All of that makes me think that Cointerra, BFL and other companies are mining right now with these new fancy chips. They make really good money and sell the equipment in Q1/Q2 when we still have a small chance to earn something. And several months later we sell our miners to total noobs and waiting for new open pre-orders of more powerful miners.

[Damnsammit]

All of that makes me think that Cointerra, BFL and other companies are mining right now with these new fancy chips. They make really good money and sell the equipment in Q1/Q2 when we still have a small chance to earn something. And several months later we sell our miners to total noobs and waiting for new open pre-orders of more powerful miners.

That is a fair assessment (and a cruel reality) for the mining business since ASICs have become some prevalent (and fraudulent)

[willpower101]

This is one more thing I don't get. I also read about it in group buys. They say: "when our group miners are no longer profitable we sell them and share the money". But who is going to buy non-profitable miners?

Here ya go.  People are always buying non-profitable miners... I have no idea why.

https://bitcointalk.org/index.php?board=75.0

and

www.ebay.com

They buy unprofitable miners because they suck at using the calculators and bias them towards profitability on accident.
I have a 5x9 whiteboard full of economic equilibriums (based on excel, I just like to visualize my data by hand too) that tell me exactly what is profitable and what isn't based on every factor I can think of.
Mining is profitable in only a select few scenarios today, and profitable in the future only if estimated conditions based on no less than three different variables are met. It's a gamble, but I could put my money in stocks at 12% return all day long. (Most years I average 23-24%)
Very few calculated risk investments can offer 100 - 400% returns in time periods of months.

Equipment not only holds value, it shifts with the price of BTC. As BTC goes up, worthless equipment becomes more... haha, worthless technically. But by that, I really mean the price increases and you can sell it for plenty.

This mining calculator does a really good job of estimating the worthlessness of machines actually. http://www.vnbitcoin.org/bitcoincalculator.php

[itayl2]

This is one more thing I don't get. I also read about it in group buys. They say: "when our group miners are no longer profitable we sell them and share the money". But who is going to buy non-profitable miners?

Here ya go.  People are always buying non-profitable miners... I have no idea why.

https://bitcointalk.org/index.php?board=75.0

and

www.ebay.com

They buy unprofitable miners because they suck at using the calculators and bias them towards profitability on accident.
I have a 5x9 whiteboard full of economic equilibriums (based on excel, I just like to visualize my data by hand too) that tell me exactly what is profitable and what isn't based on every factor I can think of.
Mining is profitable in only a select few scenarios today, and profitable in the future only if estimated conditions based on no less than three different variables are met. It's a gamble, but I could put my money in stocks at 12% return all day long. (Most years I average 23-24%)
Very few calculated risk investments can offer 100 - 400% returns in time periods of months.

Equipment not only holds value, it shifts with the price of BTC. As BTC goes up, worthless equipment becomes more... haha, worthless technically. But by that, I really mean the price increases and you can sell it for plenty.

This mining calculator does a really good job of estimating the worthlessness of machines actually. http://www.vnbitcoin.org/bitcoincalculator.php

Would you be willing to share these mathematical insights here / in private?

[shliie]

Why do you keep hearing mining is unprofitable?
Because, mining really is unprofitable, when you take electricity costs and increasing difficulty into consideration.

[cowandtea]

I'm very new to this game, so excuse my ignorance.

Say I purchase 312GH/s (3 rigs * 104GH/s) for around 13,500 USD. (sounds a reasonable price?)
According to what I know, 1800W consumption sounds about right for these rigs.

Obviously I join a pool before beginning to mine.

If I plug in the data in here: http://www.bitcoinx.com/profit/ with a time frame of 3 months, which I realize is a bit simplistic, but I get about 8390 USD net profits.

I realize difficulty may spike due to next gen ASICs and the fact that I would get the rigs only in Jan-Feb 2014, but what is the missing factor here that would convert profits of 8390 USD to some kind of a negative number?

What I am missing here?

90% of the posts here mention mining as no longer profitable. I'm wondering whether I'm missing something, or this is just a strategy?

Please help!

Because those that buy bitcoin when it is low at around 100-200$ already gain 5-10 times... meanwhile miners still trying to break-even

[mailhot]

Really hard question. I also cost a lot of money and time.

[Damnsammit]

Why do you keep hearing mining is unprofitable?
Because, mining really is unprofitable, when you take electricity costs and increasing difficulty into consideration.

Another sockpuppet that doesn't understand math...

[Marbit]

i dont know how to speculate on difficulty. it is too abstract. all i know is, it is skyrocketing, and may continue to skyrocket. whatever you do, don't pre-order, every day counts.

[AustenN]

If you can count on getting into mining within the next week I believe it will pay off. The sooner the better. Its more about the investment into bitcoin than paying off what you spent getting into it. Depending on where bitcoin is in 2 years will determine if you made money or not. All in all, this late into the game no one really knows how profitable mining will be. It all depends on where the value of the coins goes.

[Leppoda]

Why do you keep hearing mining is unprofitable?
Because, mining really is unprofitable, when you take electricity costs and increasing difficulty into consideration.

Another sockpuppet that doesn't understand math...

Hi, I am new here.
Could you take some time to explain that?

I have read quite a lot of posts here, and many of them mentioned the mining revenue will drop 20-30% every 2 weeks.
If that's the case, it seems all of the mining equipment I found on the net cannot earn itself back.
I have also use some online calculator and find that the cex.io cloud hashing cannot earn itself back as well.

[bryant.coleman]

Because those that buy bitcoin when it is low at around 100-200$ already gain 5-10 times... meanwhile miners still trying to break-even

I'll just say one thing. People who bought their mining equipment for BTCs did the most heavy mistake.

My friend put 90% of this BTCs to buy used mining equipment when BTC was at 100 usd. He got only around 40% of his cost in return (so far), despite operating the equipment almost continuously.

[BTCuserz]

Just get out ur mining picks, slap on some headphones, and get mining away, you will catch up in no time.

https://images.weserv.nl/?url=s7.postimg.org/4fqkdtcqz/china_internet_jpeg.jpg&fnr

[itayl2]

Why do you keep hearing mining is unprofitable?
Because, mining really is unprofitable, when you take electricity costs and increasing difficulty into consideration.

Another sockpuppet that doesn't understand math...

Perhaps you could use your condescending tone to enlighten us as to the profitability of it?

With the expected spike in difficulty, and the shipping time of the ASICs out there, how is one to make a profit?

Also an answer comprised of more than 1 line would be great.

[Extesa]

Why do you keep hearing mining is unprofitable?
Because, mining really is unprofitable, when you take electricity costs and increasing difficulty into consideration.

Another sockpuppet that doesn't understand math...

Perhaps you could use your condescending tone to enlighten us as to the profitability of it?

With the expected spike in difficulty, and the shipping time of the ASICs out there, how is one to make a profit?

Also an answer comprised of more than 1 line would be great.

I am so confused now.
Some people says mining is not profitable, even when you exclude the electricity cost.
Some people says mining is profitable, even after you take the electricity cost.

Would appreciate if someone can show the math to me!!