You Can't Mine Bitcoin Profitably (Prove me wrong!)

[jeyzeus]

I know you might be thinking that if the price falls down to 15k then the difficulty will drop 50% and thus your earnings in BTC won't be affected

I don't think this. I do think that if the price falls 50%, many miners will be incentivized to turn off their machines because it's unprofitable to mine. but it's a risk you take with mining. just gotta out hodl & out mine em. someone with $150 a month bill has a way lower overhead than someone with tens, hundreds or thousands of miners.

1- Getting the gears at a very good price
2- Having a very low power rate
3- Starting at the right time of the cycle
4- Lots of prayers that the Chinese piece of gear which has little to no quality control will not break in 2 weeks.

The miners at compass have a 1 year warranty & they have techs on site to repair em. 6¢ is low IMO when average residential is 10-15¢+

people have been telling me not to mine the second i got into the space. if i just ignored them and even got whatever miner available it would have mined a lot. if a lot of people who had 1-10 GH/s from 2013-2020 ran their machines, ignored the noise and held, they'd be up like crazy.

getting a miner back then it wouldn't have prevented me from DCAing. IMO a lot of people act like you can't do both or if doing one explicitly prevents you from doing the other. there isn't a "real" an opportunity cost when mining imo. if you only have $8k to play with, I would consider the s19. i don't think the chip shortages will be resolved any time soon and low power rack space will be hard to come by. by the time it's available, the difficulty will be so high that the less efficient miners will have a very hard time competing. i think even at 25T the S19's had an ROI of 2 years. If they can mine for at least that long, and then mine for another year or two without crazy repairs then it might make sense. many people think that chip efficiencies will not see a significant increase in a long time and I tend to believe that. Look at how competitive & relevant the S9 chips have been. IMO its best to have a long term perspective on this and intend to mine 1-2 years after the next halving.


there's also the KYC aspect. to get similarly priced coins in terms of privacy, you usually need to coinjoin or use Bisq to retain privacy. If you mine, it could be seen as paying a premium for privacy. everything is a trade off but i do appreciate your insight! ty for the discussion

[1714133532]

1714133532

[1714133532]

1714133532

[flip4flop]

I can tell you I am in the same boat as you. I GPU mined for around 2 years and it was a wildly profitable venture on both the accumulation side and selling all my equipment before I had to move and my electricity rate at the time was awful. I thought about jumping into ASIC mining for a few years but all the doom and gloom kept me out of it. Those machines are now almost double what they were when I was looking at them last year and what I would have mined would have been more profitable than buying and holding plus the cost of the machines.  I am looking very closely at that Compass deal as well and just having trouble pulling the trigger. Mainly I canno get a solid answer yet on what would happen if Bitmain did not deliver on time or at all.  That is my main hold-up.

[xwshamim]

I will say trading or holding bitcoin is a more better way to make profits If you invest the money in buying btc which you use to buying and setting up your mining rig. And sell them when the price is high or do daily trades carefully by understanding the market your profits will be much more than that you earn from mining. Also you will be a greate trader by doing research which can earn you more money by sitting and using your mobile

[flip4flop]

It really all depends. Yes you can trade and buy low and sell high but it’s easier said than done. With mining it is what is it.  You generate BTC daily. It’s up to you to decide when to sell whatever amount you want. Your money spend is on the machine. Once you pay it off your only upkeep is ensuring it runs and electric. It could run for another year with no issues and you only paid one amount for the setup and nothing more. You generate more every day as opposed to buying. Unless your are investing more often or DCA if it dips your 1BTC is always 1 unless you are swing trading it putting it at risk. You make a few bad trades you quickly are lower with no way to get more without putting it back at risk trading or buying more.  Once your miner is paid off the risk much lower while the profits become infinitely higher. In addition you still have the value of the miner if you choose to sell.

[xwshamim]

You are wrong :v.  If you dont have to spent money on electricity  then its profitable  for you :p prove me wrong. People cant make profit because they have to spent huge money every month on electricity

[xonar2]

There is a legitimate reason for people to mine until the end of the world though and pay a little overhead compared to buying already-existing BTC:

Mining is a way to create completely new, fresh BTC with zero history, at least until the 21 million BTC network hard limit is reached.
Coins that have never moved on the blockchain, have no history and can't be traced to any exchange or other wallet.

No tax authority, third party, investigator can ever know who owns these freshly minted BTC with any amount of effort or pressuring exchanges to give out their wallet addresses.
Because there is no trail to follow at all.

Which kinds of people need these fresh BTC from new mining blocks is up for speculation, but they exist.

[kano]

Except that every block mined says who found it except for the exceptionally rare lucky people who mine a block solo on their own systems, don't have it orphaned, get the reward and no one can work out 'where' the block came from - which is also rare since block distribution speed is critical to not being orphaned and thus it's usually easy for well connected node networks to see the IP of who found the block ...

There are extremely few of these such blocks ... I have a screen that tells me who mined each and every block as it is found and it's been a while since it said it didn't know ...

[stompix]

No tax authority, third party, investigator can ever know who owns these freshly minted BTC with any amount of effort or pressuring exchanges to give out their wallet addresses.

Oh really?
To actually have a credible chance of mining a solo block you will need at least 30 miners, that would be around 100kw of power, getting over the fact of importing gear worth hundred of thousands on and get it pass customs, setting a farm, consuming 100 times the average us household electricity or 300 those of Germany, do you think you will get undetected?

Miners leave far more traces than a guy giving 10 bucks to a homeless guy to buy some coins at an BATM, besides, if you're mining on a pool, the moment the pool sends those coins your way they are already used or dirty, so, at what could you use them different than coins purchased for an exchange?

[mikeywith]

No tax authority, third party, investigator can ever know who owns these freshly minted BTC with any amount of effort or pressuring exchanges to give out their wallet addresses.

Oh really?

I have heard that argument before, it's simply based on the fact that mining pools operate and can operate without any regulations , license or KYC of any sort, so most mining pools won't be forced to handle information regarding their clients, so think about it this way.

A fresh block > miners, this is a single transaction which says pool xyz sent x bitcoins to abc and that's all about it, so even knowing the mining pool that created that output you can't do much with that information, unless the pool hands you the information of that miner such as their IP address, total hashrate and other addresses they might have used on the same account.

With exchanges however, since most of them involve the use of fiat money wether to buy or to sell crypto, they are subject to regulation, exchanges that require no KYC will soon be history , we saw how binance turned around recently, it's just how things are, if you own an exchange and want to operate freely worldwide you will have to obey the rules of  world (more so the U.S law).


But then, under some circumstances, regulation can get to mining pools as well, the government can even access the pool's server with court warrant, a less "democratic" government can detain the pool's owner/s' and force them to hand out those information, so mining to a pool isn't really as "private" as most people think.

With that said, there are still better and more secured ways that ensure better privacy, using a good mixer makes your coins a lot harder to track than mining to a mining pool.

[philipma1957]

Excuse my provocative title 

I am finding that except for a narrow range of BTC price rise, it is better to buy BTC than to mine it.

I have been looking at buying Antminer S19j Pro 100 TH (3250W) from compassmining using their hosting ($.0624/kWH) and F2 pool (1.2%)

It costs 8000 (after 3% credit card fee).

Assuming a starting BTC price of $30,000, with starting difficulty at 1.4363, with both increasing at 4.4% per month:

After 3 years:

 - ROI of mining - 181%
 - ROI of purchasing BTC - 351%

Change the BTC price rising to 6.5% per month, which corresponds to BTC doubling every year:

 - ROI of mining - 337%
 - ROI of purchasing BTC - 806%

If BTC rises only 1% per month, then the ROI of each about the same.

 - ROI of mining - 40%
 - ROI of purchasing BTC - 42%

At less than 1% rise per month, mining does better than purchasing.

So, you can't mine BTC profitably at current miner prices and hosting fees at compassmining.

Prove me wrong!
 

Okay your math is good but

I can cherry pick and show opposite numbers  with ease.

here goes

I take cash and buy an s19pro when btc was 10k I am charged .25 btc but I purchased the miner with cash via my bank.

So pretend I purchased the coin and hodl. I now have .25 btc = 7875 usd

or I got the miner On Jan 1 2021 it has mined steady since then or about 195 days.

Now 110th x 195days = 21450th in a day  if you please.




coin price and earning price has been all over the place. Up down left right

but 21450 x 28 cents = 6006 My mining dealing is 1/2 goes to the host or 3003

So I have 3003 in my pocket and a used s19pro which I can sell right here right now for over 5000

So 3003+5000 = 8003  and I put in 2500

if I did coin the coin is 7875

So I am better off with the gear as of today. Never mind my tax breaks  I get for mining over buy and hold the coin.

Of course you can say I could of sold the .25 btc for as high as 16k. yeah the s19pro used was over 14k.

Now if the s19pro breaks on me I am fucked but if btc tanks to 10k I am back to where I was.

So basically as long as your gear does not break and turns daily profits you are not fucked mining.

Actually mining is a completely different animal than buy and hodl.

I'd like to run your numbers through my spreadsheet.

What is the 28 cents?

Your mining pool takes 50%??

What is your electricity rate?

my power rate is ½ the coins mined.

28 cents is current viabtc payout for 1 th of hash rate.

so a 110th is really 55th as  i gave ½ the coins.

I know that since i got the machine in jan i have been paid as high 50 cents a th and as low as 17 cents a th.  so

110 x 195 days of mining = 21450 th x 28 cents is 6000 usd worth of coin

divide by 2 you get 3000 usd. why because I pay ½ the coin i mine which is ½ of 6000 or 3000

so i used 2500 bank order  when coins were 10000. i could have 7875 in coin buy and hodl.

or. 3000 from mined coin and a s19pro that i can get 5000 easy peasy thus i have 8000 .

actiualy really more as i could get more like 6000 for the unit which would be 9000

and in coin i would have  7875.

the math is correct as it really happened for me with the one s19pro i own.

but if the gear broke i would be fucked .

Simply put if you cherry pick you can make either   one mining or  buy and hodl.

Miners tend to not hodl coin. we take sure profit and less risk.

buy and hodl can be a killer.

buy a coin at 10k and it shot to 64k you kept hodling and now it is 32k

ugh.

meanwhile i mine prices drop from 64k to 32k but diff dropped from 25 to 14.3

my cash earnings are about 500 a day for the mine. my may earnings last time coins were 64 k were about 500 a day. no loss in cash.

my coin earnings were .0047 a day in may
my coin earnings are about 0.0088 a day in july.

so as a miner i am still in bull mode.

i hodl some of my coins and right now that is bearish.

so i have a built in hedge that a coin buyer. does not have.

so to visit this add 60 days of mining say .30 cents a th. or 33 a day x 60 =  1980 say 2k

my fee is ½ the coins or 1000

so i am at 4000 in coins and the gear is worth 9000

that is 13000. buying and holding is .25 x 48000 = 12000

so i am at 13000 and the buy and hold guy is at 12000

i calculated the coin value as turned to cash.

so i started with 2500 cash and got back 4000 cash a certain profit of 1500 no matter what happens.

yeah my gear can brick but no matter what I am 1500 ahead.


while the guy that purchased .25 btc and held has no certain profit since he hodl.

so if btc crashes his 12000 is at risk much as my 9000 value for the used s19pro.

I really dont like tossing buy and hodl against buy gear and mine comparisons since they are completely different animal.

so far the  buy and mine is working into a price increase from 10 k to 48k.

and i make my mined coin into cash. on a fast basis.

of course the s19 pro can brick 🧱 which may be a bigger risk than coins tanking to 16k

 

[Tsub]

Excuse my provocative title  

I am finding that except for a narrow range of BTC price rise, it is better to buy BTC than to mine it.

I have been looking at buying Antminer S19j Pro 100 TH (3250W) from compassmining using their hosting ($.0624/kWH) and F2 pool (1.2%)

It costs 8000 (after 3% credit card fee).

Assuming a starting BTC price of $30,000, with starting difficulty at 1.4363, with both increasing at 4.4% per month:

After 3 years:

 - ROI of mining - 181%
 - ROI of purchasing BTC - 351%

Change the BTC price rising to 6.5% per month, which corresponds to BTC doubling every year:

 - ROI of mining - 337%
 - ROI of purchasing BTC - 806%

If BTC rises only 1% per month, then the ROI of each about the same.

 - ROI of mining - 40%
 - ROI of purchasing BTC - 42%

At less than 1% rise per month, mining does better than purchasing.

So, you can't mine BTC profitably at current miner prices and hosting fees at compassmining.

Prove me wrong!
 

You leave out one big thing.  What if BTC doesn't rise 6.5% a month?  Yes, it jumped up, but what happens when it goes the other way and how does that influence your "buy" model?  Prices rise, prices fall... factor that in please.

[philipma1957]

Excuse my provocative title  

I am finding that except for a narrow range of BTC price rise, it is better to buy BTC than to mine it.

I have been looking at buying Antminer S19j Pro 100 TH (3250W) from compassmining using their hosting ($.0624/kWH) and F2 pool (1.2%)

It costs 8000 (after 3% credit card fee).

Assuming a starting BTC price of $30,000, with starting difficulty at 1.4363, with both increasing at 4.4% per month:

After 3 years:

 - ROI of mining - 181%
 - ROI of purchasing BTC - 351%

Change the BTC price rising to 6.5% per month, which corresponds to BTC doubling every year:

 - ROI of mining - 337%
 - ROI of purchasing BTC - 806%

If BTC rises only 1% per month, then the ROI of each about the same.

 - ROI of mining - 40%
 - ROI of purchasing BTC - 42%

At less than 1% rise per month, mining does better than purchasing.

So, you can't mine BTC profitably at current miner prices and hosting fees at compassmining.

Prove me wrong!
 

You leave out one big thing.  What if BTC doesn't rise 6.5% a month?  Yes, it jumped up, but what happens when it goes the other way and how does that influence your "buy" model?  Prices rise, prices fall... factor that in please.

if he purchased at 60k a coin he is at 43k a coin today. so buying in april 2021 and hodl til sept 2021 he is off a lot.

oh i likeed your post so i read your other posts ? I gave you enough merits to make next rank.
keep posting away.

[exciter8]

If I rode correctly,

"After 3 years:

 - ROI of mining - 181%
 - ROI of purchasing BTC - 351%"

what did I do lol
Such a wast of time for me xD 

[philipma1957]

If I rode correctly,

"After 3 years:

 - ROI of mining - 181%
 - ROI of purchasing BTC - 351%"

what did I do lol
Such a wast of time for me xD  

and if you purchased coin in april 2021 at 64k you are now down 30%

basically as I said I do not believe any one should compare mining to buy and hodl.  Yet people do over and over and over again.

By the way buying  an s9 for 75 bucks with a psu was doable last summer July 2020.

see how they did if they purchased it and mined and held. they whaled

[n0nce]

You leave out one big thing.  What if BTC doesn't rise 6.5% a month?  Yes, it jumped up, but what happens when it goes the other way and how does that influence your "buy" model?  Prices rise, prices fall... factor that in please.

The thing that makes people believe it rises 6.5% per month is evidence by the past 10 years. I mean, the number is an average and I'm not even sure it's the correct number. But if you really zoom out, Bitcoin price is constantly increasing. Actually kind of linearly on the log scale, so in other terms it's increasing exponentially on the linear scale.

Bitcoin price increase in the last 5 years is 6700%, 1340% per year, or 111.66% per month. So looking back, 6.5% per month is quite conservative. But you must be prepared to possibly take a 30% or 50% loss for a few months or years, just to recoup that loss manifold in years to come. Keep in mind I don't think it's really possible to time the market, that's why I say 'be prepared...' because statistically my statement holds true from historic data, without any speculation. Short-term, nobody can guarantee 6.5%/moth, of course!

[stompix]

Bitcoin price increase in the last 5 years is 6700%, 1340% per year, or 111.66% per month. So looking back, 6.5% per month is quite conservative. But you must be prepared to possibly take a 30% or 50% loss for a few months or years, just to recoup that loss manifold in years to come. Keep in mind I don't think it's really possible to time the market, that's why I say 'be prepared...' because statistically my statement holds true from historic data, without any speculation. Short-term, nobody can guarantee 6.5%/moth, of course!

A 6700% growth for the next two periods of 5 years means BTC would reach $2.8 million in the next 5 years and then $188 milllion in 10 years.
Of course, it won't be possible.

Also statistically, looking at peak points in the last 4 years, bitcoin has grown from 20k to 60k, that's 300% in 40 months, that's 7.5% a month.

Rather than looking at percentages, you can look at the price a thing people are may time ignoring since it's not that spectacular, Bitcoin has grown by 40k in 4 years, a similar performance over the next period would put the price at around 100k in the next 4.
This growth is just like economies work, you can have a series of 20% GDP increase in poor countries but at the economy begins to find its place in the developed world there is no room for such growth as you simply don't have resources of any kind to keep the same momentum. Where are we going to find the 60 trillion?

[n0nce]

Bitcoin price increase in the last 5 years is 6700%, 1340% per year, or 111.66% per month. So looking back, 6.5% per month is quite conservative. But you must be prepared to possibly take a 30% or 50% loss for a few months or years, just to recoup that loss manifold in years to come. Keep in mind I don't think it's really possible to time the market, that's why I say 'be prepared...' because statistically my statement holds true from historic data, without any speculation. Short-term, nobody can guarantee 6.5%/moth, of course!

A 6700% growth for the next two periods of 5 years means BTC would reach $2.8 million in the next 5 years and then $188 milllion in 10 years.
Of course, it won't be possible.

I know, I know, I'm just saying 6.5% average monthly growth for the mid-term future is not that outrageous, it's certainly less than various historic moving averages.

Statements like 'this wont be possible' and 'where does the money come from' of course can be countered to some extent with increased inflation of fiat currencies. Like, the money comes from their money printers The more USD tanks, the more BTC rises (even though purchasing power of said Bitcoin might not increase too much).

[AlbertaBTC]

All parties here are bullish, in general, on BTC. The question isn't whether mining BTC is more or less profitable than buying BTC. The opportunity cost is having any fiat to begin with. If you are already loaded up to the gills with BTC then you are measuring your ROI in terms of BTC. Spend 1BTC on a mining contract, then as long as you mine back that 1BTC, you have broken even. How BTC has performed during this time period is irrelevant.

[Cakeonit]

I can, if I don't use Compass, get the miners for a good price, and this is the thing for me - I use miners to at least partially heat my home with some creative duct work.  And my electricity rate is 0.10$/KWH... So your mmv but if you are ever faced with oil heat, the fact that you can capture heat for your own use may change everything.

[NapHappy]

I can, if I don't use Compass, get the miners for a good price, and this is the thing for me - I use miners to at least partially heat my home with some creative duct work.  And my electricity rate is 0.10$/KWH... So your mmv but if you are ever faced with oil heat, the fact that you can capture heat for your own use may change everything.

Yes, getting miners for a good price is key, but at the moment miner prices are far higher than what they were when I started this thread.

I live where it gets cold in the winter, but hotter in the summer.