Caveat emptor

[googlemaster1]

I like to think of all the things I do for bitcoin promote it and a healthy bitcoin ecosystem in the most fundamental of ways.  Some of the things that are most important to me are:

1)  Mining at a fair price, with gear from a fair company.  Buying Bitmain equipment the last few weeks would be a good example of this.  Not supporting pre-orders and potential fakers.

2)  Buying bitcoin when the panic is high.  I am no trader, but other than mining I try to keep my buying of bitcoin very low and stable.  However, when there is a huge panic or flash crash, I will regularly pull up my boot straps and rush in.  A) Because I believe in it, and B) It shows support in the most desperate of times.

3)  Getting friends excited about bitcoin, getting small businesses to accept it (even if they don't hold it) and being a positive figure.  I often will buy mining equipment and sell it to local folks for almost no markup at all (usually enough to cover my gas and hour of my time) rather than trying to rip people off.  Be a positive figure in the bitcoin community, and people will think of you when they think of bitcoin and say "this guy is a good guy, so bitcoin can't be that bad".  There seems to be a culture of people trying to sell outdated equipment to people for very large amounts of money, thankfully, a lot of that has stopped now, but the "suckers" who bought old BFL equipment at the end of last year for thousands of dollars are probably feeling a little burned by miners who seek profit above all else.  If people/miners keep trying to rip people off like this, society at large will see bitcoiners as just a bunch of scammer assholes.

Anyway, that's just my 2 cents.... as the OP said, PLEASE don't buy cloudhashing, community hosting services are OK, but these conglomerate mining factories are disgusting.

[Bicknellski]

Stay away from known problem companies.

BFL
HashFast
Avalon

Specifically and check out reputable threads that steer people in the right directly like Dogie's thread: https://bitcointalk.org/index.php?topic=456691.0 which should be stickied here as well.

Or check out my thread here which cuts through all the BS and just gives you a Thumbs Up or Thumbs Down on the various sellers of mining equipment.

https://bitcointalk.org/index.php?topic=734027.msg8291788#msg8291788

[DPoS]

Stay away from known problem companies.

BFL
HashFast
Avalon

Specifically and check out reputable threads that steer people in the right directly like Dogie's thread: https://bitcointalk.org/index.php?topic=456691.0 which should be stickied here as well.

add KNC to that list.. their greed is in overdrive

[Biffa]

Stay away from known problem companies.

BFL
HashFast
Avalon

Specifically and check out reputable threads that steer people in the right directly like Dogie's thread: https://bitcointalk.org/index.php?topic=456691.0 which should be stickied here as well.

add KNC to that list.. their greed is in overdrive

Not sure on that one, they haven't failed to deliver on any pre-orders yet. I'm not saying thier datorhall mine isn't more commercial that their earlier NPP commitment led us to believe but then, for me the doors not shut on them quite yet.

I'm not sitting around twiddling my thumbs waiting for a neptune to appear, hell no, if your a miner then you shoulda been out getting bitmain's S1 and maybe S2 kit way before now, and even looking closely at the Chinese 1TH dragon kit. The spondoolie stuff is a bit overpriced and too colo centric for my needs right now but if they came out with a quieter slightly slower cheaper version then I think they could take the market, of course they would need an international presence and start to build up some stock rather than pre-ordering.

[DPoS]

Stay away from known problem companies.

BFL
HashFast
Avalon

Specifically and check out reputable threads that steer people in the right directly like Dogie's thread: https://bitcointalk.org/index.php?topic=456691.0 which should be stickied here as well.

add KNC to that list.. their greed is in overdrive

Not sure on that one, they haven't failed to deliver on any pre-orders yet. I'm not saying thier datorhall mine isn't more commercial that their earlier NPP commitment led us to believe but then, for me the doors not shut on them quite yet.

I'm not sitting around twiddling my thumbs waiting for a neptune to appear, hell no, if your a miner then you shoulda been out getting bitmain's S1 and maybe S2 kit way before now, and even looking closely at the Chinese 1TH dragon kit. The spondoolie stuff is a bit overpriced and too colo centric for my needs right now but if they came out with a quieter slightly slower cheaper version then I think they could take the market, of course they would need an international presence and start to build up some stock rather than pre-ordering.

might want to take off any KNC glasses you might still be looking through...  they did fail on their promise to sell more hardware to their customers who instead of buying ants, thought KNC would stand by their word

their word is mud

[Biffa]

Stay away from known problem companies.

BFL
HashFast
Avalon

Specifically and check out reputable threads that steer people in the right directly like Dogie's thread: https://bitcointalk.org/index.php?topic=456691.0 which should be stickied here as well.

add KNC to that list.. their greed is in overdrive

Not sure on that one, they haven't failed to deliver on any pre-orders yet. I'm not saying thier datorhall mine isn't more commercial that their earlier NPP commitment led us to believe but then, for me the doors not shut on them quite yet.

I'm not sitting around twiddling my thumbs waiting for a neptune to appear, hell no, if your a miner then you shoulda been out getting bitmain's S1 and maybe S2 kit way before now, and even looking closely at the Chinese 1TH dragon kit. The spondoolie stuff is a bit overpriced and too colo centric for my needs right now but if they came out with a quieter slightly slower cheaper version then I think they could take the market, of course they would need an international presence and start to build up some stock rather than pre-ordering.

might want to take off any KNC glasses you might still be looking through...  they did fail on their promise to sell more hardware to their customers who instead of buying ants, thought KNC would stand by their word

their word is mud

LOL you know I don't wear KnC glasses, I am hardware agnostic. I just don't think that you can call them a scam for not shipping more than one batch of upgrades. I don't think they are saints, just a business whos job is to make as much money for themselves as possible. But they haven't scammed the vast majority of their customers like Hashfast or Blackarrow or Bitmine or AMT or BFL by missing delivery by 4,5,6,12 months.

[DPoS]

LOL you know I don't wear KnC glasses, I am hardware agnostic. I just don't think that you can call them a scam for not shipping more than one batch of upgrades. I don't think they are saints, just a business whos job is to make as much money for themselves as possible. But they haven't scammed the vast majority of their customers like Hashfast or Blackarrow or Bitmine or AMT or BFL by missing delivery by 4,5,6,12 months.

the bar has been set so low

remember that KNC delivered prototypes in Oct and used early customers as both QA and techincal/customer support reps while everyone was just so happy that they actually got something delivered in a timely fashion

I could go on and on but if this is the standard of excellence, then run away from mining as fast as you can

[windpath]

First of all gmaxwell, thank you for your post, its awesome.

I have been trying (unsuccessfully) to explain mining to family and friends and now I have a place I can send people to help them understand!

Your first paragraph is strong, and might I suggest elaborating slightly on proof-of-work, for a newb that could mean close to nothing...

As for my experience mining:

I started out to just "test the waters" in February after having recently discovered Bitcoin and its wondrous variety of avenues to explore.

I read about the pre-order nightmares here and thankfully decided to steer clear.

That lead me to my desire to find people with miners in hand ready to ship....

I bought 2 Ant S1's from a seller on Amazon and was badly beat up on the price. All in, after PSUs and additional cooling, those first 2 ants cost me close to 3k, I'm almost embarrassed to admit it, but maybe it will help someone else down the line. To date they have mined 1.7766 BTC (overclocked), less then 1/3 of their cost. Will they break even before they are consuming more $s as energy then they produce? I'm still optimistic, but prepared to take a loss for what I have learned.

I now have five more Ants on the way, purchased from Bitmain at their lowest price offered yet. As I write this behind me sits a shelf with PSUs wired up and waiting for their Ants, they were to arrive today and I was excited to get them mining before the next difficulty increase.

Unfortunately UPS is having some weather issues and they are stuck in Alaska right now...

Will I make my investment back or would I have been better off waiting for the 3rd round of S2's? Only time will tell.

What I do know is that I have been bitten by the Bitcoin bug, and that's not going to change....

Whatever happens, this forum has been a great place to learn, and I thank you all (well most of you) for your participation in my education!

[Hermonminer]

I continue to maintain that thinking of mining in terms of ROI on equipment costs is only one way of thinking about mining for money. As I have said elsewhere mining rigs are tools like mechanic, plumbing, electrician tools. In order to do your job and EARN money you need certain tools. Mechanics, plumbers, electricians, etc. need their tools upfront in order to work and earn income. The cost of tools is simply the cost of doing their particular job and they do not think in terms of ROI on a wrench or a pair of plyers (unless the tool is some major capital asset). They will, of course, for tax purposes, "write" the tools off as an expense but that is purely a tax issue.

Every BTC I earn mining is converted to $$ and is spendable income. I am not interested in "investing" per se except in the broadest sense of investing in the BTC economy. The only mining expense I care about is the cost of electricity which is a fixed utility cost for living. My miners are not really either depreciated or appreciated in their initial value although in truth the value of my mining equipment may go up as BTC prices rise but that is only if I sell my rigs. Additionally, as BTC drops in value relative to $$, my mining equipment (viewed as replacement cost) can, and has, gone down. I buy my rigs when that happens.

I have noticed that in some of the BTC mining calculators that the cost of the mining rigs is used relative to expected BTC earnings over x time. Yet, those calculators never amortize the cost of the machines and that is a flaw. If one is concerned about ROI, then the rigs must be amortized over time, the value simply should not stay the same over x amount of time. That is just a normal "business" accounting practice. But, then again, since I have a different philosophical approach to mining, I could not care less about ROI or amortizing the cost of the machines. As long as they continue to work as a tool, they are are earning.

I make/create between $800-$1500 a month mining. That is money I did not have before and all I do is sit on my butt and check that the units are running properly 2-3 times a day. My machines are paid for out of disposable cash I chose to spend on them. If earning money is your goal, money you did not have before, and all you do is sit there then do it and don't worry about ROI. If you are interested in thinking of mining as an investment, then knock your socks off but you are better off buying stocks and earning dividends. In the mean time I am spending my easily-earned money and I have long ago considered the money spent on the rigs as gone.   

[Bicknellski]

I continue to maintain that thinking of mining in terms of ROI on equipment costs is only one way of thinking about mining for money. As I have said elsewhere mining rigs are tools like mechanic, plumbing, electrician tools. In order to do your job and EARN money you need certain tools. Mechanics, plumbers, electricians, etc. need their tools upfront in order to work and earn income. The cost of tools is simply the cost of doing their particular job and they do not think in terms of ROI on a wrench or a pair of plyers (unless the tool is some major capital asset). They will, of course, for tax purposes, "write" the tools off as an expense but that is purely a tax issue.

Every BTC I earn mining is converted to $$ and is spendable income. I am not interested in "investing" per se except in the broadest sense of investing in the BTC economy. The only mining expense I care about is the cost of electricity which is a fixed utility cost for living. My miners are not really either depreciated or appreciated in their initial value although in truth the value of my mining equipment may go up as BTC prices rise but that is only if I sell my rigs. Additionally, as BTC drops in value relative to $$, my mining equipment (viewed as replacement cost) can, and has, gone down. I buy my rigs when that happens.

I have noticed that in some of the BTC mining calculators that the cost of the mining rigs is used relative to expected BTC earnings over x time. Yet, those calculators never amortize the cost of the machines and that is a flaw. If one is concerned about ROI, then the rigs must be amortized over time, the value simply should not stay the same over x amount of time. That is just a normal "business" accounting practice. But, then again, since I have a different philosophical approach to mining, I could not care less about ROI or amortizing the cost of the machines. As long as they continue to work as a tool, they are are earning.

I make/create between $800-$1500 a month mining. That is money I did not have before and all I do is sit on my butt and check that the units are running properly 2-3 times a day. My machines are paid for out of disposable cash I chose to spend on them. If earning money is your goal, money you did not have before, and all you do is sit there then do it and don't worry about ROI. If you are interested in thinking of mining as an investment, then knock your socks off but you are better off buying stocks and earning dividends. In the mean time I am spending my easily-earned money and I have long ago considered the money spent on the rigs as gone.  

Well measured way to look at mining but what is your take on DeathandTaxes post on Break even difficulty by hardware efficiency (power cost = value of BTC)?

https://bitcointalk.org/index.php?topic=281279.0

or thoughts on BurtW's Projected Minimum Cost per BTC over the next year?

https://bitcointalk.org/index.php?topic=518111.0

[calyptocryptid]

TL;DR

Pre-orders are bad. Companies that sell pre-orders should feel bad.

[Bicknellski]

How to Spot a Liar.

[retro72]

Not technically a scam company but you might want to add CoinTerra to your list. Not only were they considerably late on delivery. Their units were 25% below advertised hashrate and used 25% more electricity.

To top it of anyone who requested a refund has been left hanging in the wind. I've personally been waiting 5 weeks for my refund ($25k) and they they have stopped replying to my emails. Definitely buyer beware.

I'm almost at the point where I'm done with mining altogether. The whole marketplace seems to be teeming with unscrupulous scumbags only out to make a quick buck.

[angebok]

The hardware vendors have an enormous informational and control advantage over their customers: They know what the pre-order queue and delivery pacing will look like, they know and control how much of their own hardware they intend to buy with, they control how much hardware they sell to other people.  As such, I do think it's a little disingenuous to say "risk is yours to take". If it was pure uncertainty unknown the the buyer and seller then that would be the case, it's not so simple where the informational/control advantage exists.

While there is some truth to what you are saying, no one knows what the landscape will look like in a few months and that's why I believe the risk is still largely on the buyer's side. The risks the manufacturers face are multiple as well, however they have been paid for taking said risks. The buyer (miner) is taking a huge risk gambling on a future that's virtually unknown to anyone. Also, while one company can control what they do and they should be held responsible for their actions they can't control what others are doing or predict the future, therefore I will argue that ultimately the risk is yours to take.

  :(Yes, what you said is very right!

[k9quaint]

A most excellent original post. Gmaxwell is to be congratulated.

[Monzsta]

First of all gmaxwell, .....
Whatever happens, this forum has been a great place to learn, and I thank you all (well most of you) for your participation in my education!

I am in completely in line with your line of thinking, albeit on a smaller scale. 

However, hardware seems to depreciate at an accelerated rate in the face of ASIC's.  My rig of 1.98 mh/s (couldn't hit the 2k hurdle with one 7970 ($300 ebay, 11/28/13 ), one 7950 ($332, don't ask...01/24/14) and two 5850's ($125, 01/10/14 and $99, 12/26/13) draws around 800 watts.  I bought a gridseed 5 chip ($130, 04/29/14) which brings me to 2300ish kh/s and have been mining with a handful of 5850's (@ 20~ kh/s_) since I figured out the train was already doing 100 mph by the time I got on board.

My cost of electricity is .098 cents/kw/h. Any idiot not sitting next to a screaming rig wondering how to keep it from melting down in the summer heat knows ASIC miners are the future and the demise of the hobby.  $20/day?  LOL!  Try $2/day.  If you're lucky.  Got an extra $1,000 floating around for a scrypt blade?  I know I don't. Sell the cards I have?  Nah.  I'll game with them.  Then probably relegate them to the green board pile in the spare room.

Just like Nascar, the little people get run out by the money.

[MichaelAlbayati]

Hello everybody,
I'm very new to this world... as of BFL, I've read a lot of bad and sad stories about the pre-ordering and late delivery. However, I've found the BUTTERFLY LABS BFL 50 GH/s , which is almost every on the web.

Please give me advices of whether one of you guys used it or no.

Also, could some one direct me to the right place on how to do calculations?

Any advice is appreciated.

[samsonn25]

Hello everybody,
I'm very new to this world... as of BFL, I've read a lot of bad and sad stories about the pre-ordering and late delivery. However, I've found the BUTTERFLY LABS BFL 50 GH/s , which is almost every on the web.

Please give me advices of whether one of you guys used it or no.

Also, could some one direct me to the right place on how to do calculations?

Any advice is appreciated.

They are so old and obsolete by the next difficulty jimp theu are worhless for mining.   But you can use as a space heater.

[MichaelAlbayati]

Hello everybody,
I'm very new to this world... as of BFL, I've read a lot of bad and sad stories about the pre-ordering and late delivery. However, I've found the BUTTERFLY LABS BFL 50 GH/s , which is almost every on the web.

Please give me advices of whether one of you guys used it or no.

Also, could some one direct me to the right place on how to do calculations?

Any advice is appreciated.

They are so old and obsolete by the next difficulty jimp theu are worhless for mining.   But you can use as a space heater.

Thank you so much for the advice, what do you suggest, what do you think I could get as a start up point?

I want to start with something small and simple so I can understand everything before I can get a more complicated system.

[Zelek Uther]

Hello everybody,
I'm very new to this world... as of BFL, I've read a lot of bad and sad stories about the pre-ordering and late delivery. However, I've found the BUTTERFLY LABS BFL 50 GH/s , which is almost every on the web.

Please give me advices of whether one of you guys used it or no.

Also, could some one direct me to the right place on how to do calculations?

Any advice is appreciated.

They are so old and obsolete by the next difficulty jimp theu are worhless for mining.   But you can use as a space heater.

Thank you so much for the advice, what do you suggest, what do you think I could get as a start up point?

I want to start with something small and simple so I can understand everything before I can get a more complicated system.

Small and simple: why not try a USB stick miner?