Getting a loan to build mining rigs?

[silvergoldandbitcoin]

Hey all. Here is what I'm considering:

Getting a $10,000 loan to buy parts to build mining rigs.

The loan quote I got from Wells Fargo was $10000 for 60 months at 10.233% APR, monthly payment of $213.62.

The risks I can think of are:

1. Bitcoin and altcoins crash in value so hard that no profit can be made.

2. Power surge destroys the rigs, even though they are plugged into surge protectors.

3. Freak natural disaster/fire destroys their location.

4. Someone somehow discovers where they are and steals them.

5. My income from apps I have on the app store suddenly stops.

Apart from number 3 I think all are either totally avoidable, or such a low chance of happening that it is worth it.

I think that number 5 is the most likely, but I highly doubt that the income would just suddenly stop. Slowly trickle down, month after month, but not stop.

What do you guys think? Am I missing something?

Based on www.coinwarz.com

Mining DOGE it would take a little more than 2 months to completely pay off the loan.


Anyways, let me know your thoughts.

Thanks

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[kalus]

personally i would take out a 10,000 loan for hardware, but I don' t know what your financial situation is. 

don't overpay for parts, and don't invest money you can't lose.   

[kikeda]

I would considering you can pay the loan in a month or so if you mine the right coins.  Youll probably end up with around 10mhs with 1k-1mhs ratio. That would be around 70-90k doge a day until block halving, lets say youll end up with 2M doge in a month or so, @ the current price 2M= 4 + BTC and considering you could always sell the hardware at 20% price depreciation so its worth it, and doge prices would probably be up heaps after the block halving, so if I were you ill take that loan and build the rig ASAP.

[aeddan1]

Don't forget about electricity and maintenance costs.  Also you'll need adequate cooling.

[railzand]

always deduct 50% from coinwarz and similar, so 3.5 months
don't trust one altcoin. think about middlecoin or hashco.ws, effectively these are btc pools
make sure the early payback clauses on your loan aren't too harsh
follow scrypt asic development. this may just change electricity usage in 3-9 months or may change everything
lot of time involved tweaking cgminer, reinstalling drivers
otherwise +1 to previous members' posts

[notlist3d]

I would HIGHLY recommend not taking out a loan on it. If you pay it off after 2 months in best case will you owe interest for entire term of loan? Get a second job if no savings.  

First off losing money to the interest would suck.   Count on with that amount some crapping out dealing with RMA's.  Also electricity add that in to equation.  Also consider downtime it can be from anything from a flicker in power to internet down.  There are components out of your control that occasionally happen.

I would start off with one rig, pay it off then move on and on.   Dump more in as you can/want.  If they do make a asic that is reasonable on price it will make a huge change in it all.   The price of those scrypt asics right now are not to worry about, but when/if next gen hits there could be a huge bubble mining power.

[vrm86]

I have took about 1900$ loan to build 2MH rig in the end of november 2013 and guess what... doge has paid-off my investment and let me buy more hardware to expand hashrate  I have tried many new altcoins, some of them give nice pay-outs when hit exchanges, some of them aren't worth a shit now. Now I'm mining on one of the multipools with auto-exchange (this way now  I would get ROI after ~5 months) as I felt a bit tired with catching almost every new altcoins, but it gave me very nice profit after all.

Dont take loan if you haven't available funds to eventually pay off debt, otherwise you would be under constant psychical pressure of current mining profitability. I treat mining as a game - a bit serious, but it's fun

[leancuisine]

2. Power surge destroys the rigs, even though they are plugged into surge protectors.

3. Freak natural disaster/fire destroys their location.

4. Someone somehow discovers where they are and steals them.

I have read somewhere that you could get insurance on them, however that may be costly.

[sitefive]

In 2months I have been in this coin-game, I have made over $10k from my $20 inital investment!
if you are smart you dont even need to take out the loan....

[tootapple]

In 2months I have been in this coin-game, I have made over $10k from my $20 inital investment!
if you are smart you dont even need to take out the loan....

$20 investement? What are you talking about?

[SheepOnDrugs]

I honestly would never take on a loan for mining.
Of course it might seem nice and the profit might be compelling but so much could go wrong.
If you wouldn't be able to pay back the loan for some reasons you're pretty much fucked. Although it may not seem like it would happen, I wouldn't risk it.

[sitefive]

In 2months I have been in this coin-game, I have made over $10k from my $20 inital investment!
if you are smart you dont even need to take out the loan....

$20 investement? What are you talking about?

actually think a bit less then that, bought 0.02bitcoin on ebay and thats all I have spent.
Keep hustlin!

[cozk]

oh boy lol.

A loan to speculate with it.

Good plan to go bankrupt.

Invest what you are willing to potentially lose (on a 50-50 basis).

If you need a loan you can't afford to lose anything obviously.

[Silvano]

oh boy lol.

A loan to speculate with it.

Good plan to go bankrupt.

Invest what you are willing to potentially lose (on a 50-50 basis).

If you need a loan you can't afford to lose anything obviously.

and don't forget to take a look to the ASIC scrypt miners developements

[crazyates]

I would not invest any money that you wouldn't mind ever seeing again.

If you have the ability to borrow 10k, dump it down the toilet, and pay it back over the next few years without destroying the financial landscape of the rest of your life, go for it. If you drive a junker shit-mobile, live in a trailer, have CC debt up to your eyeballs, and you would go bankrupt if you ever had to pay the 10k back out-of-pocket, then I would say it's a bad idea.

1. Bitcoin and altcoins crash in value so hard that no profit can be made. - GPUs can be resold for the majority of their purchase price. ASICs cannot.

2. Power surge destroys the rigs, even though they are plugged into surge protectors. - This is what insurance is for.

3. Freak natural disaster/fire destroys their location. - Again, insurance. Get it

4. Someone somehow discovers where they are and steals them. - Insurance!

5. My income from apps I have on the app store suddenly stops. - See my original point.

One thing you might consider is forming an LLC, and having the business get the loan instead of you personally. I'm not a lawyer or an accountant, but it might be worth looking into.

[tootapple]

In 2months I have been in this coin-game, I have made over $10k from my $20 inital investment!
if you are smart you dont even need to take out the loan....

$20 investement? What are you talking about?

actually think a bit less then that, bought 0.02bitcoin on ebay and thats all I have spent.
Keep hustlin!

well congratulations on that