Why people buy not profitable hardware?

[hynx]

1) Lots of people don't pay electricity
2) Whilst faster machines *might* be more difficult to make in the future, and that's a very big *might*, people can always make lots more chips with current technology
3) Mining equipment is going to come out that is a lot more energy efficient than current gen.

If you learn one thing from technology, is that it never stands still. There are always innovations when there is money to be made and people competing for that money.

1. Somebody always pay electricity, it maybe included in your rent (ur still paying for it), or ur leeching off your parent/employer, but somebody always pays. There's no such thing as free electricity.

I don't think people care about the electricity bills of their boss or their university.
Yes, someone has to pay the bill, but as long as it is not the miner himself, he don't really care.

That's too naïve. Don't be fooled that people/institutions will never notice the unusual increase in their bills, it's only a matter of time until such mining hardware is banned from these "free" places.

[empoweoqwj]

1) Lots of people don't pay electricity
2) Whilst faster machines *might* be more difficult to make in the future, and that's a very big *might*, people can always make lots more chips with current technology
3) Mining equipment is going to come out that is a lot more energy efficient than current gen.

If you learn one thing from technology, is that it never stands still. There are always innovations when there is money to be made and people competing for that money.

1. Somebody always pay electricity, it maybe included in your rent (ur still paying for it), or ur leeching off your parent/employer, but somebody always pays. There's no such thing as free electricity.

2. Yes you can make more chips, but who will buy them if the profit can not even cover electricity?

3. no, there will be equipment that is slightly more energy efficient than current gen, but not "a lot more". We are already at 22nm, there can be no more significant improvements, or do you think asic manufacturers will develop better manufacturing than Intel? because intel CPU from 3 years ago (for example i7-2600k, has nearly identical performance as current gen equivalent i7-4770k, ok 4770k is slightly better, by like 3%)

But if its not the miner that is paying, the miner doesn't care about the cost, and so doesn't have to factor it into his price calculations. Basic economics. If you aren't paying for something, its free to you.

[crimdelacrim]

I think it is just fascinating. Even if the antminer I just bought only mined 0.001 bitcoins its whole life, its just cool that it is actually mining. Ya, I could have used that gift card to buy a shitty pair of Beats headphones all the kids are wearing but I would rather get a USB mining device and learn about mining bitcoin.

[sgbitcoinsg]

Man those ebay scammers...

[fattypig]

I'm a Bitcoin noob, and I was digging ebay auctions (mainly EU).
I don't understand why ASICs sell at a price well over profitability.
I used this calculator: http://bitcoinwisdom.com/bitcoin/calculator

Each bid price always escalate, with tens of bidders. People currently ends buying Red-Fury 2.5 GH/s at 80 Euro, Bi-Fury 5 GH/s at 160 Euro, and so on. For example:
http://www.ebay.it/itm/Bi-Fury-BiFury-USB-Bitcoin-ASIC-Miner-bis-wahnsinnigen-5-GH-s-Sofort-Lieferung-/251434458313

Assume having already in hand 5 GH/s. With difficulty increment step of only 30%, zero electricity cost, zero pool fee, it will never gain more than 40 Euro maintaining current BTC/EUR exchange rate.

IMHO:
1. ASIC buyers feel BTC will skyrocket to more than 10,000 USD.
2. ASIC buyers mine some weeks, and then resell the hardware, so they hope to end with a profit from sell+mining-buy.
3. Buyers are antique collectors  

Or maybe there is something a noob can't understand.
Any hint?
Thanks,
Piero

again, not everyone is good with calculation and bitcoin difficulty, if you tell them they are going to earn blablabla bitcoin they will believe...

[CapitolCoin]

I imagine the category of hardware people buy for fun is mostly limited to the under $100 USB sticks. I bought one of the original block eruptor USBs awhile back while waiting for my KnC machine just to play around- I knew it wouldn't be profitable. But the market was flooded with them and the cost was below $20, so it was worth it to me. I think the AntMiner U1s are the same thing for this generation of the network.

I think the higher dollar stuff on eBay is really split 3 ways:

1. People who believe the value will rise astronomically. If they make 2 BTC and the price shoots to $5,000/BTC or more, not only will the BTCs be worth 10k but their old hardware will be resalable too.
2. People who believe they profit from another angle, such as mining a lesser coin or leasing out their box by the day or hour.
3. The ignorant, or willfully ignorant- people with gold fever.

I have to say, I sympathize with group 3 more then I ever thought I would. I was very fortunate to be able to get in with a second batch KnC Saturn, but its easy to get that panic feeling that your losing your place in the race and you gotta keep up. Just a few more GH/S! Even if you do the math and it comes out wrong (like I did with the KnC Neptune) you start trying to make it work, trying to convince yourself that if you put yourself in debt to gain the most amount of GH/s now, you'll be able to recover on the other side when bitcoin takes off. And of course, its quite possible your right. But, in the short term at least, its very possible that it won't. If you can't live with that, then you shouldn't buy in, but its hard to get past that sometimes.

I have gained a new respect for the poor folks who lost their shirts in the gold rush.

[gdassori]

Don't tell them, I'm still trying to sell some HD5850s.....  

[cryptohead]

Currently I'm mining litecoin with just one card.
I extensively did my homework (I don't have money to lose) and it came as a high risk, uncertain reward investment.

But I end up checking the pool and RDP to my mining computer every hour or so. It's addictive. I know I'm not making breakeven until 5-6 months form now, presuming the diff will only increase 3% per interval, which is hugely understating it.
But it makes me feel involved and active.

I had a similar feeling playing ogame and checking every hour to make sure no one crashes my fleet.

If I am to add up the cost of time and expertise to that of hardware, I'm afraid mining is a net losing proposition at my scale and resources.

So, I'm guessing the buyers might also be former GPU miners trying to feel they are still in the game. The price, 40-50$ will be written off as entertainment expenses.

[pjviitas]

Currently I'm mining litecoin with just one card.
I extensively did my homework (I don't have money to lose) and it came as a high risk, uncertain reward investment.

But I end up checking the pool and RDP to my mining computer every hour or so. It's addictive. I know I'm not making breakeven until 5-6 months form now, presuming the diff will only increase 3% per interval, which is hugely understating it.
But it makes me feel involved and active.

I had a similar feeling playing ogame and checking every hour to make sure no one crashes my fleet.

If I am to add up the cost of time and expertise to that of hardware, I'm afraid mining is a net losing proposition at my scale and resources.

So, I'm guessing the buyers might also be former GPU miners trying to feel they are still in the game. The price, 40-50$ will be written off as entertainment expenses.

There is so much fucking FUD out there that there is a whole legion of newcomers out there that scared to death of buying hardware.

E-bay provides a safe alternative.  For Example:

I recently sold a Mining Rig on Ebay: http://www.ebay.com/itm/100GH-s-ASIC-MINER-Block-Erupter-Blade-Mining-Rig-with-Backplane-and-PSU-/261371727365 for around 1952USD shipping in while around that time you could damn near get an Antminer for the same price which has double the hashing power.

After the auction was over I gave some advise to one of the losers to come to this forum for the best deals on hardware via a group buy. his response was "Thanks for the tip but I only trust E-bay"

This is probably only one of the many reasons why people use E-bay.

[D05GTO]

BitcoinWisdom calculator can really show how un-profitable buying mining hardware can be. But there are variables that makes a huge difference on the outcome.  These are variables that can't be known.  IE.. actual difficulty increase 20,25,30% .. BTC Price. 10 - 10000?  No idea which way the wind will blow, but a bunch are probably hoping the price will rise to break even or ahead. 

Dunno, it's just something about making your own currency that seems to hold value or grow.  Feels like you have more control.  Unlike, holding fiat that is sitting in a bank vanishing threw inflation every day. 

[burlow]

because people getting into it for the first time don't care about profits as much as they do learning. they will pay extra to gain some experience. I "over paid" for my first miner but I don't regret it at all - it taught me so much and now I mine profitably on a much larger scale because of what I learned (market timing, reputable companies, etc).

[krampus]

because people getting into it for the first time don't care about profits as much as they do learning.

Bullshit. The rush of new miners is motivated 99% by dreams of profit and getting in on the ground floor (even though that day has long since passed).

[Rias]

because people getting into it for the first time don't care about profits as much as they do learning.

Bullshit. The rush of new miners is motivated 99% by dreams of profit and getting in on the ground floor (even though that day has long since passed).

Of course dreams of profit are always there but to learn something new, something big and interesting is a fine motivation as well.
Bitcoin is a first cryptocurrency in the world, there was none before isn't it fascinating? 

[krampus]

because people getting into it for the first time don't care about profits as much as they do learning.

Bullshit. The rush of new miners is motivated 99% by dreams of profit and getting in on the ground floor (even though that day has long since passed).

Of course dreams of profit are always there but to learn something new, something big and interesting is a fine motivation as well.
Bitcoin is a first cryptocurrency in the world, there was none before isn't it fascinating? 

It's a fine motivation, but it's not what draws most miners to cryptocurrency.

[kodiak1120]

One thing I think people always leave out of this question is whether the buyer will be able to sell the hardware some time in the future.  When I first got into mining, I bought 10 USB block erupters for $8.00 each.  The price of a bitcoin at that time was less than $200.00.  I realized I would be lucky to break even at the current price, but I was looking for something to do with my Raspberry Pi and I had faith in bitcoin and thought it would likely go up.  When I bought them, everyone told me I was crazy.

A few weeks later I was hooked and snagged two BFL 30 gh/s Little Singles for about $650.00 each (I actually only bought the second one because I thought the first guy had ripped me off and wouldn't send it).  Again, everyone said I was crazy.  A few days later, the price of bitcoin sky-rocketed.  When it hit it's peak I sold the block erupters for $60.00 EACH!  I made over $500 just on that hardware.  I also sold the Little Singles about two weeks ago for $750 each, which means I mined with them for almost three months, made a few bitcoins and sold for a profit again. 

I realize I could have just bought bitcoins with my initial hardware investment, but I wasn't really looking to invest $1,200.00 all at once.  By buying and basically flipping hardware, I was able to do it incrementally. 

The bottom line is no one can say whether hardware is a good buy unless they know how much bicoins will be worth in future.  The BFL units I bought were purchased for less than asking price because the sellers were desperate to get rid of them at the time.  Those same units were selling for 3x what I paid for them less than a month later.  It all depends on where the price of bitcoin goes.

Kevin

[Gator-hex]

I think most people just lazy and just don't do the math.

There are some though that will pay more to have a miner in hand now, gambling on mining a profit, rather than wait 6 months on a pre-order list.

[Zangy]

because people getting into it for the first time don't care about profits as much as they do learning.

Bullshit. The rush of new miners is motivated 99% by dreams of profit and getting in on the ground floor (even though that day has long since passed).

I am in the 1% then...

[pjviitas]

because people getting into it for the first time don't care about profits as much as they do learning.

Bullshit. The rush of new miners is motivated 99% by dreams of profit and getting in on the ground floor (even though that day has long since passed).

Ok fine...so miners are a bunch of idiotic scumbags looking to make a profit...so how does that make us any different than speculators again?

No one in this game we call Bitcoin is any better than the other.  We are all gambling on something.

Now if you claim that you have some sure thing that will guarantee will make you a profit then I will return the favor and call bullshit on you.

Why not quit bugging us miners and go back to the speculator sub-forum....cant you see we are working here?

[krampus]

Ok fine...so miners are a bunch of idiotic scumbags looking to make a profit...so how does that make us any different than speculators again?

The original question -- the title of this thread -- seeks clarity on the subject of why people buy unprofitable hardware. Nobody said miners are a bunch of idiotic scumbags (well, I didn't, anyway). My statement was related to what drew miners into the game in the first place -- not to learn, but by the promise of profits. I stand by that statement.

No one in this game we call Bitcoin is any better than the other.  We are all gambling on something.

Better? No. But clearly, some are quite a bit stupider than others.

Now if you claim that you have some sure thing that will guarantee will make you a profit then I will return the favor and call bullshit on you.

Nice strawman attack! Nowhere did I ever suggest that I had a foolproof profit generator.

Why not quit bugging us miners and go back to the speculator sub-forum....cant you see we are working here?

Fuck off. If you don't want to be bothered, then don't read the fucking thread. Twatwaffle.

[Sonny]

BitcoinWisdom calculator can really show how un-profitable buying mining hardware can be. But there are variables that makes a huge difference on the outcome.  These are variables that can't be known.  IE.. actual difficulty increase 20,25,30% .. BTC Price. 10 - 10000?  No idea which way the wind will blow, but a bunch are probably hoping the price will rise to break even or ahead.  

Yes, someone may expect the difficulty increase to slow down to something like 15%, but still you will not be able to get profit with a lot of the hardware, especially for those on eBay.

And, if the profitability comes from the expected uprising btc price, it would be better and easier to just buy bitcoin directly.