Has mining ever been profitable "at current rates"?

[precrime3]

It seems all the money seems to go to the miners that keep mining when everyone is telling the to turn off their rigs. Was thinking about this, has there ever been a time in the last 5 years where mining was profitable at current rates?

[jamesc760]

I was mining when a btc was well under $100. "Profit" is a subjective term. When I was making a $20 weekly "profit" back then, I was happy. You see, to a miner, the money/btc spent on a mining rig is a sunk cost. Towards the end of 2013 when the btc price was rising, most of us were busy buying pre-orders and whatnot, because we thought the party would never end.

Well, the party is over now and there are lots of people with hangover.

[dandirk]

It seems all the money seems to go to the miners that keep mining when everyone is telling the to turn off their rigs. Was thinking about this, has there ever been a time in the last 5 years where mining was profitable at current rates?

Minning rig companies... always sell at a price when there is a profit "at current rates"...  Sadly in many cases these profits are calculated for "now" when the item is in pre-order... gets delays 18 gagillion times and boom no so much profit any more.  Some say the companies mine themselves, I think companies just have poor project/time management for a product that is SOOOO time dependent.

Usually that profit is much much lower then their own, they easily squeeze about 80-90% of potential profits out of the miner just by how they price it.  A good example is the Antminer S1...  They have been lowering the price each week due to price/difficulty changes.  Sure they might hit a profit/loss floor but the margins have been pretty good for them up until now.

The only rigs being turned off are older rigs where the price + difficulty was getting close to retirement anyways, the price change just made it earlier.   If you bought a rig yesterday, you are running it for a loss to get as many BTC out of it in hopes value goes up to save the day or at least SOME of your money.

[Hyena]

The sad thing is that historically you would always make a better investment by buying and holding bitcoins than buying mining hardware.

[bitcoinsrus]

The sad thing is that historically you would always make a better investment by buying and holding bitcoins than buying mining hardware.

[fonzie]

 

Mining

 

[Elokane]

The sad thing is that historically you would always make a better investment by buying and holding bitcoins than buying mining hardware.

That is false. I bought my mining gear at the end of May 2011. It has made me many more Bitcoins than I could otherwise buy at the price then with the amount I spent.
The GPUs are still working to this day.

[DhaniBoy]

better if you but BTC and hold it instead buy mining hardware and mining BTC from it

[Bit_Happy]

The sad thing is that historically you would always make a better investment by buying and holding bitcoins than buying mining hardware.

That is false. I bought my mining gear at the end of May 2011. It has made me many more Bitcoins than I could otherwise buy at the price then with the amount I spent.
The GPUs are still working to this day.

Of course mining has sometimes been profitable.
How else would there have been such a massive mining bubble created?

[Hyena]

The sad thing is that historically you would always make a better investment by buying and holding bitcoins than buying mining hardware.

That is false. I bought my mining gear at the end of May 2011. It has made me many more Bitcoins than I could otherwise buy at the price then with the amount I spent.
The GPUs are still working to this day.

That's not when my history begins. Also, during rallies, mining may become temporarily profitable, depending whether you hold your coins or sell them immediately and maybe buy them back after a crash has occurred. Either way your tales of mining are of primordial times and somewhat irrelevant. Thanks for pointing it out though, it's good to know how the things were once upon a time

[dropt]

The sad thing is that historically you would always make a better investment by buying and holding bitcoins than buying mining hardware.

That is false. I bought my mining gear at the end of May 2011. It has made me many more Bitcoins than I could otherwise buy at the price then with the amount I spent.
The GPUs are still working to this day.

That's not when my history begins. Also, during rallies, mining may become temporarily profitable, depending whether you hold your coins or sell them immediately and maybe buy them back after a crash has occurred. Either way your tales of mining are of primordial times and somewhat irrelevant. Thanks for pointing it out though, it's good to know how the things were once upon a time

History isn't limited to whatever time frame you existed in.  I started mining in late 2011, early 2012 and my story is the same as Elokane's.  Well, minus the part where I have any GPUs running.

[precrime3]

So at one point, mining was profitable at current rates?

[lightfoot]

Mining is a perfectly competitive market. Therefore it is *impossible* to make any sort of long term profit. This does not mean you can't make short term profits, but over the long term the barrier to entry is too low, the skills are non-existent, and miners compete with each other in a race to the bottom.

Note that if you can enhance the value of mining, or do it in a different way you could make a profit, but that is by using your value-added brain, not by simply mining.

As to turning off miners, I'm watching as the event horizon for electricity prices vs. bitcoin generated is being approached. It is economic suicide to run a miner when the cost of electricity and heat going in matches or exceeds the value of bitcoin coming out. This is not sunk cost, this is sunk operating cost and the only rational solution is to shut down. That should cause difficulty to stabilize, but since people suck at math I expect mining to continue to increase :-)

We'll see. End of May is when I have scheduled to turn off my miners. But even if you have a super efficient ant miner, you will reach this point soon as well.

[precrime3]

When antminers turn off, difficulty lowers, wouldn't that vest time to mine is when everyone else is turning off there's?

[lightfoot]

When antminers turn off, difficulty lowers, wouldn't that vest time to mine is when everyone else is turning off there's?

Sure, but as soon as they turn on the power the diff will go right back up. And there will be a certain percentage of miners who will mine at a total loss, so profits probably still will not happen.

We shall see.

[pixl8tr]

When antminers turn off, difficulty lowers, wouldn't that vest time to mine is when everyone else is turning off there's?

Nope, wishful thinking.  Thats the same thing people said when ASIC's were introduced. "When the GPUS' are turned off the difficulty will flatten out."  That never happened.  Just look at the hashrate historical record.
When antminers are turned off, faster and more powerful miners will be turned on. That is probably a more accurate statement.  ;-)

  

[atp1916]

If you aren't getting reamed by electrical costs and you are doing GPUs that can hit other coins, then it is profitable. 

ROI is certainly dim at the moment, but it's still there for the GPU people.

[Soros Shorts]

The sad thing is that historically you would always make a better investment by buying and holding bitcoins than buying mining hardware.

Others have pointed out that early GPU mining was profitable at current BTC prices.

In addition to that, I paid $1500 for my Batch 1 Avalon which made about 600 BTC in its lifetime. When I gave it away for free to a friend in Nov 2013, it was still making a few BTC a month.

Edit: That $1500 would have bought me at most 120 BTC around the time I paid for the Avalon.

[precrime3]

Would comparing to how much bitcoin compared to buying an ASIC a good way of gauging ROI?

For example,
one antminer .893 btc
or just buying .893 outright?

[pixl8tr]

Would comparing to how much bitcoin compared to buying an ASIC a good way of gauging ROI?

For example,
one antminer .893 btc
or just buying .893 outright?

From my miners way of thinking, ROI ( Return on Investment) I keep everything in terms of BTC,  so, making .893 BTC on an investment of .893 would be a loss when you consider the costs of electricity and your time spent running and maintaining your miners. ( Lots of hidden costs.  Internet , cabling, Power, support computers, cooling etc....)

 If your paradigm is dollars based( Or Rubles, Yen, Pounds, Euros... ) then you may make a return if  you consider the conversion to BTC and back again if the converted value has increased from what was originally invested, minus conversion fees.      

 If you are a gambler and want to bet on BTC increasing in value compared to your government currency,  in my opinion buying BTC with currency and Hodling is the better bet at this point.  This wasn't always the case.  Early adopters in the mining efforts came out the clear winners compared to those just starting mining now.  To make a decent mining ROI now, you need to have deep pockets and be able to purchase ASIC miners at cost or at the very least a deep discount from retail prices.

Cheers!