Mine VS. Invest VS. Trade

[ISAWHIM]

I was curious if anyone has done a side by side "speculative" and "historic" comparison of the following...

Mining BTC, with "standard" and "next-gen" hardware. (Including operation and purchase losses.)
VS.
Investing directly, by just buying coins, at various levels. (Including worst-case "top-peak" values.)
VS.
Simple trading, using realistic gains/losses, and difficulty. (Including small and large volumes.)

I do all three. Though I mine with cards that could only be used until the ASIC's arrived, which now mine scrypt-coins, to exchange for BTC.

This is what I have noticed...
My greatest return was from cross-trading alt-coins, which were traded after being mined, then ultimately cashed-out for BTC, near the top-peak. These are now being traded, to increase value and/or volume, for when the tides switch again, to a rising market.

My expenses from mining, including hardware (considered to be 100% loss, as I plan to run it until it all dies), was a rather large investment. Even though it was, and still is, hardware that is "best" for mining scrypt-coins.

Looking back, if I simply invested that money directly in BTC, it would have been about 100x greater. Now I have used those funds to purchase "next-gen" hardware ASIC's, and I am starting to wonder if I should have just kept the money to reinvest directly, Via trades.

The problem I see, with trading, is the growing volume becomes harder and harder to trade. Along with the generous, but still expensive, two-way trade-fee eating some of that reward. I could trade 2-20 BTC without issues, but now it is growing into thousands to trade, so losses become greater. (You have to wait forever for someone to snag-it, or attempt to pump/manipulate, to get a decent volume at the price you want to trade. Which does not always work when someone with opposing plans and higher volumes, knocks your efforts down a few notches.)

So, for the others who do this... what type of returns do you get? (Gains and/or Losses)

As per my findings, I may surrender to simply buying BTC directly, at (perceptive) lows. Then hope the highs I see (short-term), are the highs of the moment, and flip for an extra chance at a slightly higher return. (Which I realize actually impedes the growth of the initial investment potential, but it also helps limit the market from exploding out of control, which has as much of a negative impact, as it does for positive impact.)

Obviously, I would only use money that I still feel I can confidently risk the potential associated losses with the gains.

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[johnrogers]

I use mining for quick short term profits and trading/investing bitcoins for long term profits.
I put some money into BTC and LTC as a long term investment.  Unless there is an obvious crash coming, like the one from previous week, I usually do not bother to sell or buy more. 
Mining on the other hand made me few hundred dollars in two weeks.  I didn't spend a lot of extra money on the hardware.  I only have two graphics card (280x) for mining new simple alt coins.  I bought one specifically for mining and the other one was used for gaming. I already made back what I invested into the mining card.
Doge coin was the latest coin I mined.  I initially mined several hundred thousands in like a day but that went away quickly.  Now I'm mixing between Doge and Master.  I think the price of the older MST will see a price jump due to the fact that another more expensive version came out with EXACT same name.  It was already reflected in last night's quick price increase and drop.  I'm amazed that two coins are allowed to have the exact same name. 

[ISAWHIM]

Well, technically it wasn't a crash, it was just a series of cash-outs... But, all the same in the end. They were willing to accept less value, and the people they got the coins from, got them at a great comparative value to the market-price that followed. A crash would be if all the "buy-offers" suddenly drop to $90, and a giant gap appears, forcing people to have to sell for less. A cash-out is when they sell for a major loss, giving to those who offered less per coin. In the panic of seeing it fall, a bunch more people lose, because they think it is crashing. The price takes longer to rise, because those who just got a deal are now selling for less than others on top, because they just got them cheap, from the guy who cashed-out.

Welcome to the club. (Nice cards to start with.)

Still I see the short-term trend is up, between the multi-million-dollar cash-outs. Which is the situations I am taking advantage of, at the moment. It will rise again after the holidays, when people have extra money from income-tax returns. (All those who invested last year, at $250, and saw it rise to $1220, will have no hesitation about investing this year. Even if they thought they lost-out, because last-year $250 fell down to $90, and they sold in a panic.)

Though, I don't expect that the next spike will be much higher than $6000, as that is the apparent volume growth trend. (Pure speculation there.) The higher it goes, like gold, the less the reward and the harder it is to rise to the same exponential value of previous years. Alt-coins are the silver, to BTC being gold. They are lower value, traded less, used less, but seem to offer 2x to 3x the losses and gains, in BTC, than BTC offers itself directly. As you noticed too. Though, I don't think I would invest in Doge coin, knowing what I know about it. lol. (Not long-term.)

[Bono]

A friend of mine has a sizable mining operation - he earns close to a BTC a day but he's REALLY into Litecoin...given *coin's current price he prefers to "store" anything he generates in cold hard cash. He does okay.

I would have to say as long as you have the means to start mining effectively, you should... although I have made many hundreds just by wheeling and dealing day to day.

[knightcoin]

I came from networking area, hold some industry certifications etc ... the first time I saw bitcoin I saw it as a protocol, and I instantly thought it was a billion dollar genius idea... (although the consensus ( convergence ) between nodes are basic stuff if you are in networking area eg. L3 OSPF, BGP, L2 MPLS and more recently openflow, etc.. )    

I could buy BTC for $ 10 or less and the rewards was 50 bitcoin at time ... but I had decided to buy hardware. Firstly I wasn't thinking too much about ROI but a way to profit (sure) and the same time maintain the infrastructure... seams to me that asic manufactures was very greed in that time, delays etc... I really forgot about bitcoin for a year ... when I finally had received the gears and I started mining and hodling ... I'm not going to buy a new miner until manufactures start play a fair game within their costumers. Now I prefer help BTC by making it more and more popular on social networks etc ..

BTW, The internet as a whole is broken as well but we still fixing it ... I'm betting that maybe Van Jacobson going to fix it again

http://youtu.be/QP4A6L7CEqA

BTW1, regards "times" how many times do we need to reboot a box bootstrap something ?

[hankhill69]

A friend of mine has a sizable mining operation - he earns close to a BTC a day but he's REALLY into Litecoin...given *coin's current price he prefers to "store" anything he generates in cold hard cash. He does okay.

I would have to say as long as you have the means to start mining effectively, you should... although I have made many hundreds just by wheeling and dealing day to day.

Hi bono curious to know if you can share one or two strategies you use to wheel and deal with? i really want to learn how to do this

[Bono]

A friend of mine has a sizable mining operation - he earns close to a BTC a day but he's REALLY into Litecoin...given *coin's current price he prefers to "store" anything he generates in cold hard cash. He does okay.

I would have to say as long as you have the means to start mining effectively, you should... although I have made many hundreds just by wheeling and dealing day to day.

Hi bono curious to know if you can share one or two strategies you use to wheel and deal with? i really want to learn how to do this

Just stay informed and use a reliable service.

Case in point - I bought 2.5 BTC @ about 700 in November during the Chinese rally and sold at 1100. They crashed shortly after on news that China had totally banned Bitcoin... due to my job I'm up at odd hours, and at 2:30 AM on a Friday night, I learned that the crash was caused by some stupid mistranslated news headline.

I found this out basically before anyone else in the U.S. woke up, so I bought back in at 650 and they rose to 800 again before I sold them off.

Day trading is not a great way to make money, especially not with BTC, but if you can get a feel for trends, you can make some great supplementary income week to week.

I use Coinbase myself - not the quickest service by any means, but they seem to be on the up-and-up and continue to receive millions of dollars from interested donors and investors. I don't mind sharing my bank account info either... I figure the NSA has all my shit anyway so I should just be comfortable with the idea of paying taxes on my BTC earnings should anyway ever ask me about them.


Edit: I recommend keeping a pile of BTC that you never touch, ever. They're just so shiny!

[ISAWHIM]

Curious to know if you can share one or two strategies you use to wheel and deal with?

One of mine is this...

Now the price is high at $735, compared to the point at which it last dropped, from a cash-out. (Also near the end of a 7-day plateau.)

There is no real volume in the sales, so this is an obvious "pump", which happens to get more listings below, to "cash-out" for a better deal. Thus, a cash-out is nearing... a big one.

Sell your coins now, and buy more back after the price drops. From the looks of it, in my opinion, this looks like another $16-$20million dollar cash-out... so buy back around $400-$350/BTC. It should rise back up to about $550 in a few hours, or $650 in a day or two. (People start pulling away, when they see it falling, so he will continue until around that low.)

Scrooge doesn't take Christmas day off... he works 24/7/365 around the world.

[empoweoqwj]

I was curious if anyone has done a side by side "speculative" and "historic" comparison of the following...

Mining BTC, with "standard" and "next-gen" hardware. (Including operation and purchase losses.)
VS.
Investing directly, by just buying coins, at various levels. (Including worst-case "top-peak" values.)
VS.
Simple trading, using realistic gains/losses, and difficulty. (Including small and large volumes.)

I do all three. Though I mine with cards that could only be used until the ASIC's arrived, which now mine scrypt-coins, to exchange for BTC.

This is what I have noticed...
My greatest return was from cross-trading alt-coins, which were traded after being mined, then ultimately cashed-out for BTC, near the top-peak. These are now being traded, to increase value and/or volume, for when the tides switch again, to a rising market.

My expenses from mining, including hardware (considered to be 100% loss, as I plan to run it until it all dies), was a rather large investment. Even though it was, and still is, hardware that is "best" for mining scrypt-coins.

Looking back, if I simply invested that money directly in BTC, it would have been about 100x greater. Now I have used those funds to purchase "next-gen" hardware ASIC's, and I am starting to wonder if I should have just kept the money to reinvest directly, Via trades.

The problem I see, with trading, is the growing volume becomes harder and harder to trade. Along with the generous, but still expensive, two-way trade-fee eating some of that reward. I could trade 2-20 BTC without issues, but now it is growing into thousands to trade, so losses become greater. (You have to wait forever for someone to snag-it, or attempt to pump/manipulate, to get a decent volume at the price you want to trade. Which does not always work when someone with opposing plans and higher volumes, knocks your efforts down a few notches.)

So, for the others who do this... what type of returns do you get? (Gains and/or Losses)

As per my findings, I may surrender to simply buying BTC directly, at (perceptive) lows. Then hope the highs I see (short-term), are the highs of the moment, and flip for an extra chance at a slightly higher return. (Which I realize actually impedes the growth of the initial investment potential, but it also helps limit the market from exploding out of control, which has as much of a negative impact, as it does for positive impact.)

Obviously, I would only use money that I still feel I can confidently risk the potential associated losses with the gains.

Depends how good a trader you are. Keep full records of your trades. If you can make money trading, do it. If you can't, just buy-and-hold bitcoins or even invest in a bitcoin mining company as an alternate idea.

[ISAWHIM]

I keep looking at the "mining calculator" pages, but they all assume you cash-out what you earn, as you earn it. They don't take into consideration that most of us are mining now, and holding, then cashing out later, at the higher prices.

Would be interesting to make one of these charts or calculators. Anyone up to the task?

P.S. I am Scrooge... I gave everyone plenty of time, now I need to cash-out.

[empoweoqwj]

I keep looking at the "mining calculator" pages, but they all assume you cash-out what you earn, as you earn it. They don't take into consideration that most of us are mining now, and holding, then cashing out later, at the higher prices.

Would be interesting to make one of these charts or calculators. Anyone up to the task?

P.S. I am Scrooge... I gave everyone plenty of time, now I need to cash-out.

You are assuming the "higher prices later". Might not be the case.

[ISAWHIM]

You are assuming the "higher prices later". Might not be the case.

People are still buying at $727, though all indications show that value is falling, headed back to around $350... why would they NOT buy at 50% to 25% off the last known high-value? They don't have to buy all of them, just mine.

Remember, every coin sold by someone, was purchased by someone-else.

Well, if no higher prices later... then no point in holding then, is there. Thus, selling.

Everyone assumes higher prices later, which, eventually will come from most lows. If not on an exchange, then off the exchange. If not now, then in a year from now, or 100. It is inevitable that higher prices will come, eventually. It is never a loss unless you accept less, and cash-out permanently, or everyone throws bitcoin wallets away.

When BTC falls, and if it does not rise, you use your BTC to buy any rising alt-coin. So it is never a loss, even when it seems like one. Remember, we are buying others prior debt, present debt, and future debt, with a dollar that is constantly falling in value. (Miners and power and time.)

We have to assume... or convince others to assume. Everything is speculation. You "assume" that when you put money in the bank, that you can get it out. (Only about 15% of those with money in the bank can actually do that. After that, you get another "note", a voucher for future withdraws. More virtual-credit, for the virtual-credit we all call a dollar or "bank note". Until they can print more, or borrow it from China. So ironic!)

You also assume that when you wake, everything on the dollar-menu will be a dollar. (Well, now it is "A dollar or more", as the dollar continues to lose value. But I anticipated that fall, and assumed the price would rise as my dollar value fell, and it did. But that is like guessing that a quarter will land on heads or tails... eventually it will land on its side, and you lose.)

This is why I was interested in seeing charts for the above stated situations. Loss or gain, but at the moment, the last five years have been mostly gains. My biggest fear is that this turns into something like an actual dollar, which would just result in yearly loss after loss after loss... but predictable and steady loss.

If the difficulty gets any higher, they are going to have to build more nuclear plants to power and cool the super-computers to process the transactions and mine for coins! That alone will add value to the coin! Not to mention the cost to reverse global-warming from trillions of miners! Paid for in BTC.  

But that is speculation too. We might have cheaper stuff to mine with, that is more efficient and cooler, or hit an ice-age again. It is due... has been over 400 years since the last mini-ice-age, one is due again. (Happens in periods of global-warming, which is a natural planetary occurrence.)