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Author Topic: Opinion from experienced Miners  (Read 663 times)
milkman510
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March 06, 2014, 03:58:16 AM
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So I'm thinking about making a large(2 me) investment in mining. I've been scrypt mining  for the last 2 weeks on a 2.8MH GPU miner I built. Initially i'm looking to scale up to 30MH. Run for the next few months and position myself to upgrade to ASIC scrypt miners later in this year. My question is what is your opinion on the longevity of mining? Do you think this will be around over the next few years? Am I crazy making this type of investment in hardware and operational cost? I've been a IT admin for 14 years so I know how to run a server farm. So the technical side is not the challenge. Just think would I be better off investing into bitcoins. Or should I try to make a business out of this mining thing.
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cdb000
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March 06, 2014, 04:40:22 PM
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I have been mining Bitcoins since November 2010, initially on my PC using the GPU that was there. In January 2011 I asked myself whether larger scale Bitcoin mining would be a good thing to do.

At the time, a Bitcoin was worth about £0.20, power cost about £0.105/kWh by day and half that by night.
The Mining difficulty was rising by about 15% every 12 days.
HD5870 GPU cards could be bought for about £125, used about 230W of power and hashed at about 350Mhash/sec.
I had a 1kW power supply and a mainboard with 3 PCIe*16 slots idle in my attic.

I chewed the numbers, and decided that Bitcoin mining would probably make a moderate profit before the difficulty rose to the point where the mined coins would no longer pay for the power, at which time I intended to get rid of the GPUs on eBay.

GPUs were ordered, installed, Bitcoins were mined.... and the value of the Bitcoin rose so more GPUs, PSUs, mainboards etc. were ordered. By the time I finished mining with GPUs, I was mining at 10Ghash and the mining kit was acting as the central heating for my house. Eventually the difficulty rose to the point where the mined Bitcoins didn't pay for the power used, even allowing for the fact that I didn't need to pay for gas for heating. The GPUs are now idle, and have very little resale value, but I have a reasonable stash of Bitcoins on offline storage and I am not complaining.

The difficulty is now at the point where my current mining rig, an ASIC performing at 70Ghash/sec, barely mines enough Bitcoins to pay for its power use, and will probably never pay for its purchase cost.

The point here is that you have to evaluate:

* The cost of buying mining hardware.
* The cost of running the mining hardware - what does power cost where you are?
* The anticipated return, and how that will change assuming that the mining difficulty continues to rise. See bitcoin.sipa.be
* How much fiat money will the mined Bitcoins be worth - you have to buy equipment and power with fiat currency.

If buying mining hardware will get you more Bitcoins than simply buying the Bitcoins, it could be the right decision.
On the other hand, simply buying some Bitcoins might be easier -- when I started mining, it was *difficult* to buy Bitcoins.
Of course, if you buy Bitcoins, you risk being scammed... maybe the same is true if you place an order for ASICs these days. Back then, Bitcoins were mined on GPUs bought from ordinary computer parts vendors and getting scammed was unlikely.

Nobody can tell you what is the right thing for you to do. You have to evaluate the costs of a proposed course of action, the potential rewards and the degree of risk. If you spend a large amount of money on mining hardware and Bitcoin collapses completely, you will own a pile of expensive junk. The same is true if you simple buy Bitcoins. If you buy mining hardware and the mining difficulty rises too much, or the price of power rises you may make a loss. These days there are several companies producing Bitcoin mining ASICs and bringing out faster, more economical chips from time to time. We might expect the difficulty to continue to rise.

Make you own decision, but make it carefully.

Hope this helps!

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March 06, 2014, 05:16:06 PM
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If you have acces to free electricity, keep buying gpu's. Those new asics is good only for scrypt, not variable diff coins and sha 3 coins, those will be possible to mine only with gpus for some while.
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March 06, 2014, 08:48:05 PM
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thank you, i was about to invest in Reddcoin but now that you are advising, i will lessen my plans
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March 06, 2014, 08:53:53 PM
 #5

the best place to invest according to me is BTCBTCBTC else altcoins if you have  patience and can wait!!
milkman510
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March 07, 2014, 06:52:43 AM
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@cdb000 Thanks for the information. Bitcoin mining is next to impossible for regular people. I researched the cointerra terraminer iv and ROI with the increasing difficultly level is laughable. My angle would be altcoin mining and immediately trading to BTC. I predicted to break even within 6 months after expenses. But this assumes profitability of mining scrypt altcoins last over the next year. Its a gamble but no risk no gain. Think I will dive in and reevaluate my investment after 6 months. But I need to work on a exit plan.
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