Advice needed: 80k USD mining adventure

[Metroid]

Well using Bitstamp pricing, simply because it was also around for the last boom/bust cycle, we had a previous ATH of $1,163 in Nov 2013. This was followed by a low of $152 set in January of 2015, occurring almost 14 months later. This would represent a 7.65 times crash, which a bit more than your 5 times statement. Using this 7.65X crash from the roughly $20,000 BTC high would put us around $2,614, so yeah I would say we have not bottomed yet according to history and still have some ways to go.

The $152 you see at bitstamp lasted only for few minutes probably but it got lower in many other exchanges, $99 but like i said lasted few seconds and backed up to $200 or so rounding up.

The way I figure BTC was trading close to or just under $100 for much of 2011, with a previous ATH of ~$270 set in April of that same year.

Correction, that was in 2013, not 2011. Also the drop in 2015 to $100 lasted few seconds then backed up to $200 after 5 seconds or so and stayed there for few weeks until it hit $400 and from there it started rising again. So the bottom was $200, not $100, you trolls fail to understand what is bitcoin now and what was bitcoin before, with time bitcoin price will be less and less volatile. Also we did not have a mt-gox case or anything of that sort this time, no reason to crash more than already did, this crash is pure speculation, nothing to do with bitcoin losing trust, confidence.

Here is a graph which you can see from 2009 until now.

https://99bitcoins.com/price-chart-history/

[Za1n]

The $152 you see at bitstamp lasted only for few minutes probably but it got lower in many other exchanges, $99 but like i said lasted few seconds and backed up to $200 or so rounding up.

True, but I used to $152 as a low even if it did go lower to give you the benefit of the doubt on your 5x crash statement, if we go with $100 ($99) it would be closer to a 12x crash.

Correction, that was in 2013, not 2011. Also the drop in 2015 to $100 lasted few seconds then backed up to $200 after 5 seconds or so and stayed there for few weeks until it hit $400 and from there it started rising again. So the bottom was $200, not $100, you trolls fail to understand what is bitcoin now and what was bitcoin before, with time bitcoin price will be less and less volatile. Also we did not have a mt-gox case or anything of that sort this time, no reason to crash more than already did, this crash is pure speculation, nothing to do with bitcoin losing trust, confidence.

Here is a graph which you can see from 2009 until now.

https://99bitcoins.com/price-chart-history/

Yes, I did mis-type 2011 and indeed meant 2013. As far as the rest even if the price dropped to $100 for a few seconds it still represents a 12x decline from the high of $1200 (higher on some exchanges), but again I used a higher figure for the low anyway of $152 so it doesn't really matter. Even if we use the higher low value (which I did above) and assume only a 7.65X crash from the 2013 high, that model still puts us on a trajectory to a low somewhere around $2,500 - $3,000, again assuming we get a 7.65X crash.

No one is claiming to guess the exact dollar amount here, at least not me, but following the general trend from history we would still be looking for a low of roughly half of where we are at now to be closer to the true bottom. This is why even being generous I said it will go below $5k and may hit as low as $2k before truly hitting bottom. Even if that "hard" low is for a few seconds, the larger low trend somewhere below $5k will last much longer, probably several months before the bear trend reverses and we start to recover.

I agree there is no Mt Gox this time, if there were we would be looking to drop below $1k again, as until early 2017 that was still a high watermark for BTC to overcome for any significant period of time. So in that sense I am already padding the carnage to not be as bad as it was back then, and still think a $5k low is very optimistic with a $3k to $4k low being more likely.

I mean if you look at this from a totally zoomed out perspective, since we were all elated to see BTC go above $1,000 for the second time in early 2017, I do not think it is unrealistic to think that it could get down to $3k again, as that will still be a 3x gain in 24 months. Filtering out the 20K rise, which anyone should have known was a bubble, a $3k price at this stage of BTCs life cycle still represents tremendous gains in growth over its life. We just got used to seeing it too high due to the bubble so everyone expects it can't go that low, but again zoomed out $3k isn't really that low all things considered.

As a side note, while we don't have a Mt. Gox as stated above, there is the Tether questions still out there. If that were to prove to be in any way fraudulent we could indeed see sub $1k prices again. In all my assessments above I assume Tether will turn out fine, if not, look out below.

[Metroid]

The low for few seconds is not used as basis for an exact low in which people can freely buy, for example the $200 price people could go and buy, the $99 price hit buy orders at that price and auto back to $199 or so, for example, in 2013 and 2014, many times in certain exchanges people made mistakes when selling, typos or extreme selloffs without any reasoning which usually lasted for few seconds, 2 great lows in which I have seen is ltc from $41 to $1, all buy orders from $41 to $1 were filled, almost 80k ltc, the price was $41 and yet in an instant it hit $1, people with buy orders at $1 hit the jackpot, i myself hit the jackpot once, bitcoin was selling for $650 and there was a sell order that filled all buy orders to a low of $120 for a few seconds, i had a buy order of $159, so my point is those are not considered the real low of a coin. Yes bitcoin crashed to $99, some exchanges to $152 but it was for few seconds and those are not considered the true low. So my statement holds true, check the bitcoin price graph and try to find any 5 times greater crash than ath that lasted for few days, it never happened and the way things are, it will never happen.

[Za1n]

The low for few seconds is not used as basis for an exact low in which people can freely buy, for example the $200 price people could go and buy, the $99 price hit buy orders at that price and auto back to $199 or so, for example, in 2013 and 2014, many times in certain exchanges people made mistakes when selling, typos or extreme selloffs without any reasoning which usually lasted for few seconds, 2 great lows in which I have seen is ltc from $41 to $1, all buy orders from $41 to $1 were filled, almost 80k ltc, the price was $41 and yet in an instant it hit $1, people with buy orders at $1 hit the jackpot, i myself hit the jackpot once, bitcoin was selling for $650 and there was a sell order that filled all buy orders to a low of $120 for a few seconds, i had a buy order of $159, so my point is those are not considered the real low of a coin. Yes bitcoin crashed to $99, some exchanges to $152 but it was for few seconds and those are not considered the true low. So my statement holds true, check the bitcoin price graph and try to find any 5 times greater crash than ath that lasted for few days, it never happened and the way things are, it will never happen.

Well I guess we simply agree to disagree then. I try to stay away from saying things like it will never happen, and I don't claim to know what the exact new bottom will be, but using the 2013-2016 graphs as a model for what is happening now, I feel we have yet to hit the bottom in the current downtrend. Even ignoring the price totally, the lack of any significant trading volume shows this much. When volume returns then so will the bull market, but until then I fully expect a slow and steady market drip downward.

This is going to take more than a few months to play out and we have only just begun the shake out period. Yes institutional money will probably come in at some point and when it does rise again it will be quick, but these people are not fools and will want to buy in as cheap as possible. Expect some more months of that tree shaking price action before expecting a real recovery. All these temporary peaks and dips are just that tree shaking activity, and to loosen the most stubborn coins they will need to make some pretty big shakes yet, meaning some more big dips to try and convince everyone all is lost and they should sell now. I think we are overall on the same page, just have a difference of opinion on the price point.

[jmigdlc99]

Yea, you should invest all your money on mining equipment because it's very profitable now and the difficulty is very low , it's a good time to jump in , i just gave you what you want to hear , go a head do what you want to do don't ask here because ppl here will say the truth not the lies you would like to hear.
I see ppl like you losing money everyday because they just want to do what they want to do without listening even if they pretend they are listening
Good luck

This is very true. Today some people seem to forget the importance of profitability when it comes to mining. I understand it's easy to get lost in the novelty and excitement that mining brings along, but in the end the bottom line is there are much more profitable means of earning.

My advice is to think twice before getting into mining at this point in time.

[Za1n]

I do have my own private long term TA, but in short just look at the long term chart pattern. We are still very much in a bear market and only see low volume anytime we do get a small uptick in price. Still a long ways to go down yet in my opinion and it will take time to fully play out.

The parallels to the 2013/2014 BTC boom and subsequent crash to what is happening now is so close it is almost spooky. The way I figure BTC was trading close to or just under $100 for much of 2011, with a previous ATH of ~$270 set in April of that same year. After the run-up to ~$1,200 we took several months to drop down to a $100 low before bouncing a little and averaging out in the $200 to $300 range for much of 2015, which took about 11 months to find bottom then another 10-11 months to stabilize and begin climbing in earnest.

The current pattern very much fits this model and I predict the bottom to take a similar amount of time to be found (11-12 months ) or roughly December 2018 to January 2019. If we find the new low somewhere near the previous ATH high ($1,200), much like last time this would put us somewhere in the $1,200 range before rising again to somewhere in the $2k - $3k range to ride out much of the rest of 2019. I fully expect it to take a good 2 years before we start climbing again and looking for a real bull trend.

So even with a generous dose of "it won't be as bad this time around", a low around the $5k mark would "only" represent a optimistic 75% decline versus the more realistic 90% decline like we seen last time which would put us closer to the $2k value. So with either scenario, coin prices are heading lower making today's values look relatively expensive in comparison.

Since the original post was more about mining than trading, I will get back to my main point about how unwise it is right now to invest in mining gear to mine coins that will very soon become much cheaper to buy outright that it is to pay electric, along with hardware depreciation, etc. to mine them at a loss. Too many people think we are close to, or already have, found the bottom and the bulls will return any day, but other than forum posts from people hopeful that this is the case, there is 0 evidence it is about to occur anytime soon.

Thanks @Zain. I need to do my own research on this and I'm not sure whether I (want to) agree or not but your post was very informative. I now see how your thought process is ticking. Great information for a guy just starting out and wanting to make some sense of this madness. Appreciate it.

You are welcome.

As you can probably see most people do not want to believe this so I really do not mind if you have doubt's. I am glad to see you will do further research as you should never rely on just one opinion, especially when it comes to finances.

I just throw the information out there to give people another point to consider to counter the 1000's of "it's going higher any day now" type of posts. Some people even claim I am a troll (lol), but I have found you are now simply called a troll for stating an opinion other than the one everyone wants to hear.

[Metroid]

Well I guess we simply agree to disagree then. I try to stay away from saying things like it will never happen, and I don't claim to know what the exact new bottom will be, but using the 2013-2016 graphs as a model for what is happening now, I feel we have yet to hit the bottom in the current downtrend. Even ignoring the price totally, the lack of any significant trading volume shows this much. When volume returns then so will the bull market, but until then I fully expect a slow and steady market drip downward.

This is going to take more than a few months to play out and we have only just begun the shake out period. Yes institutional money will probably come in at some point and when it does rise again it will be quick, but these people are not fools and will want to buy in as cheap as possible. Expect some more months of that tree shaking price action before expecting a real recovery. All these temporary peaks and dips are just that tree shaking activity, and to loosen the most stubborn coins they will need to make some pretty big shakes yet, meaning some more big dips to try and convince everyone all is lost and they should sell now. I think we are overall on the same page, just have a difference of opinion on the price point.

Well lets see if history prevails once again, Bitcoin hit 19.5 almost 20k, rounding up to 20k, so in theory the maximum bitcoin might crash is to $4000 in my opinion, so far looking at that link i gave, https://99bitcoins.com/price-chart-history/ , it crashed to $6100, for people to consider below $4000 then it means a 50% crash in price, I myself think we had the bottom, price will only rise from here and the same thing will happen, thousands of trolls complained why they did not buy bitcoin when it was $200 - $300, many will complain why they did not buy now when bitcoin is $7000, their mistake is that they think bitcoin will crash further and when they see it rose very far and then those people dont buy at all and then when bitcoin hits 100k they will complain and say why why i did not buy when it was $7000, see my point, many of them prefer to buy at all time high than when it at lowest which is right now. They are doing it wrong, if they buy now they will win it, it is already low.

I myself always try to buy lower but sometimes you need to be wise and pay the current price if you think the worse has passed. One last thing is, i would invest in altcoins cause right now they are just too cheap to miss out, bitcoin only if you think the market might crash 50/50%, now if you are sure market is going up then only altcoins.

[Thekool1s]

Moving back to the topic...

@zeric, I am surprised no one has mentioned about going solar or going for coins with POS... You can check out "CrazyDanes" Solar mining thread for more information. I believe a pretty decent Solar farm can be set up with around $30K-$40K budget. As long as you don't have to pay up for energy, you will always be in the ''Green'. Also, I will recommend you to look into ZenCash's Secure Nodes and superNodes. Could be a much better alternative than mining.

Initially I was planning on a 50/50 GPU/ASIC split, but as the marked looks a full ASIC focus seems the obvious choice to me.

I dunno how you reached to this conclusion, But Getting GPUs is a far better choice than going the ASIC route. There are multiple factors here, Like E.g Warranty. Most ASICs cover around only 180 days of warranty, Plus their resale value is shit. Just look at VoskCoin's recent review about Mining in general, the dude got an L3 miner for around 1600 bucks and a year later it's selling on eBay for around only 150. He only made his money back via Selling it 3x the price due to Bitmain not pumping out enough miners. While a rig of GTX 1080 Tis is still holding up its value. So when you say its an obvious choice I don't know what factors you are taking into account.

[Bananana]

Moving back to the topic...

@zeric, I am surprised no one mentioned about going solar or going for coins with POS... You can check out "CrazyDanes" Solar mining thread for more information. I believe a pretty decent Solar farm can be set up with around $30K-$40K budget. As long as you don't have to pay up for energy, you will always be in the ''Green'. Also, I will recommend you to look into ZenCash's Secure Nodes and superNodes. Could be a much better alternative than mining.

Initially I was planning on a 50/50 GPU/ASIC split, but as the marked looks a full ASIC focus seems the obvious choice to me.

I dunno how you reached to this conclusion, But Getting GPUs is a far better choice than going the ASIC route. There are multiple factors here, Like E.g Warranty. Most ASICs cover around only 180 days of warranty, Plus their resale value is shit. Just look at VoskCoin's recent review about Mining in general, the dude got an L3 miner for around 1600 bucks and a year later it's selling on eBay for around only 150. He only made his money back via Selling it 3x the price due to Bitmain not pumping out enough miners. While a rig of GTX 1080 Tis is still holding up its value. So when you say its an obvious choice I don't what factors you are taking into account.

Well, Solar Power is one way but it isn't "cheap yet" the ROI for Solar is still about 5-10 years depending on the tax credit in your country and the electricity rate you are paying.

As for going ASIC or GPU, I would say GPU is a better way too. But new model of GPU is coming out and I am guessing it would increase the difficulty for all the ALT coin and thus making it unprofitable. To me, both ASIC and GPU is bad idea now.

In the end, with that much of money, I really suggest buying BTC or some ALT coin (Read those whitepaper please) and find few promising coin to invest.

Good luck!!

[lunobird]

GPU is not better. GPU roi is over 3 years now. Stick with the facts plz

[Thekool1s]

Well, Solar Power is one way but it isn't "cheap yet" the ROI for Solar is still about 5-10 years depending on the tax credit in your country and the electricity rate you are paying.

But since the OP is in Europe he will be subsidised. On average a panel has a warranty of 20 years so, 5-10 years for ROI shouldn't really be an issue here IMO.

As for going ASIC or GPU, I would say GPU is a better way too. But new model of GPU is coming out and I am guessing it would increase the difficulty for all the ALT coin and thus making it unprofitable. To me, both ASIC and GPU is bad idea now.

People who have access to 0.05 KW/h can still make a pretty decent ROI using GPUs, Heck even with my 0.15 KW/h I am still in the green with my rigs.

GPU is not better. GPU roi is over 3 years now. Stick with the facts plz

I am sticking with the facts, you should stop spreading your propaganda tho...

[lunobird]

Well, Solar Power is one way but it isn't "cheap yet" the ROI for Solar is still about 5-10 years depending on the tax credit in your country and the electricity rate you are paying.

But since the OP is in Europe he will be subsidised. On average a panel has a warranty of 20 years so, 5-10 years for ROI shouldn't really be an issue here IMO.

As for going ASIC or GPU, I would say GPU is a better way too. But new model of GPU is coming out and I am guessing it would increase the difficulty for all the ALT coin and thus making it unprofitable. To me, both ASIC and GPU is bad idea now.

People who have access to 0.05 KW/h can still make a pretty decent ROI using GPUs, Heck even with my 0.15 KW/h I am still in the green with my rigs.

GPU is not better. GPU roi is over 3 years now. Stick with the facts plz

I am sticking with the facts, you should stop spreading your propaganda tho...

No propaganda here. Just use what to mine a do the math you tard.

Over 900 days to ROI with his cheap electric, that's too long.  Maybe for you that's good but to me that's pathetic and you should not encourage others to rekt themselves

[Thekool1s]

Over 900 days to ROI with his cheap electric, that's too long.  Maybe for you that's good but to me that's pathetic and you should not encourage others to rekt themselves

900 days is an overestimate TBH. The coins will most likely moon in a year, so OP could technically make his money back in that timeframe. If the coins fail to 'moon', They will continue to grow at least. All time lows have settled in, We are one ETF away from a small bull run. But Anyway I Hope that the OP knows that mining isn't a get rich quick scheme, unlike you who sees 900 days ROI as a bad thing. BTW I didn't encourage him. I said, to do his research on Zencash Nodes which seem more profitable than mining.

[lunobird]

Over 900 days to ROI with his cheap electric, that's too long.  Maybe for you that's good but to me that's pathetic and you should not encourage others to rekt themselves

900 days is an overestimate TBH. The coins will most likely moon in a year, so OP could technically make his money back in that timeframe. If the coins fail to 'moon', They will continue to grow at least. All time lows have settled in, We are one ETF away from a small bull run. But Anyway I Hope that the OP knows that mining isn't a get rich quick scheme, unlike you who sees 900 days ROI as a bad thing. BTW I didn't encourage him. I said, to do his research on Zencash Nodes which seem more profitable than mining.

You truly don't know market cycles and I recommend you educate yourself more.

Your waaaayyy too optimistic.  First of all the bear trend is still intact on the daily/weekly,  and we have not confirmed a bearish reversal yet.  Its been 9 months and we're still have not found a true capitulated 30 percent dump btc bottom yet,  Once we do find that bottom there will be many months of accumulation phase. You have not even taken into the account the amount of time that is needed in accumulation before we start the slow recovery process.  This doesn't feel like accumulation on a 7k btc.  The markets in no rush to moon anytime soon so don't get your hopes up.

Yes 900 days of ROI is very bad.  Your actually just recovering your equipment cost.  You need many years after that to actually make a profit but thats an uphill battle since difficulty keeps increasing and hardware cycles last only 2 years before you need to inject more money into hardware.

[stomachgrowls]

Yea, you should invest all your money on mining equipment because it's very profitable now and the difficulty is very low , it's a good time to jump in , i just gave you what you want to hear , go a head do what you want to do don't ask here because ppl here will say the truth not the lies you would like to hear.
I see ppl like you losing money everyday because they just want to do what they want to do without listening even if they pretend they are listening
Good luck

On most cases this would really be the insight of OP itself which he do really expect to have positive feedback on what hes trying to invest on here. Capital? It is indeed enough to start your own mining rig but profitability wise? Then most of us do have knowledge will have the same opinion and feedbacks which is "Non-profitable" nowadays and basing on the rent plus its current electricity cost then he would able to find out that hes totally wasting up his own time.

Without going into any altercations or arguments, I'd like to respectfully understand more about why everyone here is against mining.

1) Profitability is down right now yes... but as long as you have a little less than $0.10/KWh electricity rate, as of now it's profitable to mine - even if only by a small margin. (Z9 and their variants are an exception). If you're operating as a business, you'd likely be eligible for various deductions that improve your bottom line. This is the current scenario.
2) Difficulty increases for everyone. Constantly. That's a fact. No arguments here. Over time the number of coins you mine will reduce.
3) I'm bullish on crypto.
4) I can afford to hold the coins I mine. i.e. I can pay for the power I use for the foreseeable future (1 year) without selling any of my holding.
5) If the crypto market collapses, I shut down my business. Declare bankruptcy. That's not a scenario I'm willing to entertain. Every business has risks. I'm in this because I expect the market to rise.
6) If the market rises, despite the lower number of coins mined, I will probably still be profitable. Plus the coins I've mined earlier and held on to at a lower difficulty will add to my bottomline.
7) If I have an intelligent split (50-50 in my case) between mining and buying coins - I'm at a win-win given the above information - the market recovers and I make a win on my investment. Mining profitability resumes and I make a win on the coins mined WITH future income intact because no matter how little I mine, mining can only survive so long as there is some monetary benefit to mining. Therefore total hashrate will reduce when losses increase significantly (kind of what's happening with litecoin now). I also have a cushion since a lot of places in the world have a much higher electricity rate than me.
I have the equipment to sell - wont get too much for asics, more for gpu's. But point is that as long as I can keep reinvesting profits and upgrading constantly, a point will come when I'll be able to pay for equipment with previously earned profit. So mining as a business, given some common sense should pay off in the long run.

Sorry for the numbered list. Just jotted them down as they struck me.

Constructive feedback anyone?

Understand those points though even most of people here do talk about non-profitability but since its your money to invest on then we cant do anything about it.We are just giving our own insights and views on whats currently happening on the market.If you do really have the passion and dedication to mine something then so be it as long you are aware on the potential risk then it should be fine.

[Thekool1s]

@lunobird Let's just agree to disagree... don't want to debate over a speculative thing. BTW You are way too pessimistic which makes you sound like a troll.

[Marvell2]

@lunobird Let's just agree to disagree... don't want to debate over a speculative thing. BTW You are way too pessimistic which makes you sound like a troll.

yeah lol , definitely a Troll things are bad but theres alot on the horizon to look forward to from progpow,
monero 2nd fork , dapp development in eth and the fact that most Icos have finished thier dumping of eth and btc

and the appetite for new ico has seriously waned.

prices seem poised to pull us back into at atvleast  10k btc soon which will raise profit of all miners

[lunobird]

@lunobird Let's just agree to disagree... don't want to debate over a speculative thing. BTW You are way too pessimistic which makes you sound like a troll.

4500-5000 btc price full capitulation price as not considered too pestamistic. Very realistic in fact. These are not even my opinion but rather the vibe I get from pro crypto traders like node investor and Chris Dunn/Rocky trading classes.

If I was a troll i would be calling a 2k+3k btc price.

Some of you think we already capitulated btc at 6k and starting to recover now. You will be very disappointed.

I'm just trying to help give a realistic expectations of how long bear markets and accumulation phase can last so you can plan out your mining farm and coin buying accordingly with proper risk management.

[minefarmbuy]

I would reach out to our brokers, they're very conservative with speculation requests. We don't want to over promise anything. 

Personally it all depends on the market your projecting. X11 has been #2 asic alt for a while now, equihash will be settling in soon. You could wait for new gear or bulk on cheap decent gear as well. GPU's give greater flexibility for alts as well.

The list of this or that is long. Most might say just buying Bitcoin outright would be best thing unless your dead set on starting a mining operation.

[sumit.mathur101]

I myself have a farm but I'll advise you not to invest in mining atm.