What every miner should know about

[komar]

There was never any "mining for massive profit. That is just a legend. Mining has never been more than slightly profitable.

Oh, it was. :)

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[odolvlobo]

There was never any "mining for massive profit. That is just a legend. Mining has never been more than slightly profitable.

Oh, it was.

1. The graph shows income, not profit.
2. The graph shows income in dollars, not bitcoins.
3. Only people at the front of the pre-order list had any chance of making a profit.

[jbrnt]

There was never any "mining for massive profit. That is just a legend. Mining has never been more than slightly profitable.

I was thinking of those days where you can still mine with CPU. Let's not look back too far into the past... Even if someone mined bitcoins with a mid to highend GPU back in early 2013, and sold bitcoin at the peak. You can expect over 200% profit. Quite massive compared to the profit nowadays.

I agree that this has now evolved into a legend for new hopeful miners.

[odolvlobo]

There was never any "mining for massive profit. That is just a legend. Mining has never been more than slightly profitable.

I was thinking of those days where you can still mine with CPU. Let's not look back too far into the past... Even if someone mined bitcoins with a mid to highend GPU back in early 2013, and sold bitcoin at the peak. You can expect over 200% profit. Quite massive compared to the profit nowadays.

I agree that this has now evolved into a legend for new hopeful miners.

But the gain in your example is from holding bitcoins, and not from mining them. The way to measure mining profit is to subtract the cost of the equipment and power (in bitcoins) from the amount of bitcoins that are mined. Most miners pay more for the equipment (in bitcoins) than the equipment mines, and so they are losing money.

[Slingshot]

RE: ASIC Mining Profitability


 Although I have yet to mine with an ASIC miner (I forced a refund through Paypal & my Credit Union for a Butterfly rig) I still want to drop in here and give the following thought for those presently discouraged:


 Mining Bitcoins has almost always been a long term speculative investment, and to date, given enough time, those that mined first with CPU's, then later on with GPU's, and more recently with ASIC's have received positive returns on their investments, over the course of time, but usually not immediately. Recently of course during the latest price boom it was immediately profitable whatever was being mined. But that hasn't usually been the case at all, historically speaking.

 Of course lately many ASIC mining rigs are not presently returning positive yields. BUT...

 But going forward, given that Bitcoin values keep steadily rising year after year through it's first decade of existence, which can be termed it's Growth period, (until it's Maturity period is had), then it's extremely likely that current ASIC mining rigs, even those not as efficient as others, will almost all, if not all, end up returning quite healthy returns in the longer term, for those patient enough to wait it out. Odds are their going to be handsomely rewarded  too, but maybe not for a year or two, or even more, before they can take very healthy profits.

 This wide spread mining and price discouragement lately has occurred again and again, every time btc price/mining profit slips negative.

 Even more than 2 years ago many stopped mining with GPU's due to negative returns versus electricity costs only to be horrified not much later on after Bitcoins price rocketed ever higher.

 Much the same for those that sold a larger portion of their Bitcoin Portfolio far too soon.

 Looking back it's quite apparent many have little to no patience, nor much aptitude when it comes to speculative longer term investments.

 Will Bitcoin's price keep marching steadily higher? Yes, odds are it will. But maybe not.

 Will there be major corrections and long periods where it appears gloomy? Yes, going forward there will still be more major corrections after ever more huge Bitcoin price surges. That's just the way this works due to many various factors.

 Currently we are on the tail end of a major price correction.

 Given that tax season just finished (except for those that filed for extensions...) now any further major price pressures are very much behind Bitcoin.

 The shitstorm of one tragic thing after another is finally about exhausted, hopefully, and much good news has been coming forth these past several weeks while most were focused on the negative issues.

 2014 is THE YEAR OF BITCOIN, not 2013. This is the Year of Bitcoin, when it fully arrives on scene.

 Hopefully the Developers of many projects can finally get their software mature enough and safe enough for the masses. My target date for such issues in the Fall of 2014. Hopefully that schedule will be met. If so, indeed 2014 will usher in Bitcoin to the Masses, indeed to the entire world. Regardless, many other Bitcoin topics are maturing, with even Institutional Investors already on scene and many more arriving at this very moment.

 Some thought that 2013 was the year of Bitcoin. But much to their surprise it's from now until next winter that will witness Bitcoin taking the world by storm.

 Soon; in days, weeks, or months, yet another major Bitcoin Price Surge will strike, and with it all the miners that are currently sweating bullets concerning profitability will be finally assured a profit.

 Of course those that stay invested much longer than others (that ended up cashing out much sooner) are apt to have much larger gains. Unless that is suddenly this entire Bitcoin Revolution is over-swept by something far superior, or by other means brought to a end.

 I for one seriously doubt anything will stop Digital Gold 2.0 (Bitcoin). At least not until something far superior is on scene, and so far nothing like that has yet arrived contrary to maybe a few very subjective and self serving opinions.

 So, for this first decade it would appear that Bitcoin is King of the Decentralized Monetary Revolution.

 And it may remain King for much longer than most would think possible. After all, it's vastly superior as a store of value than any fiat currency.

 Although it's not quite the easy to utilize medium of exchange many had hoped quite yet, it's still far superior than parking ones liquid assets in FED Dollars or the Euro Union's Euros. Much less any other fiat currency worldwide. And light years safer than trusting any banking institution with one's liquid assets as merely an unsecured creditor as soon as one makes a deposit into any of those institutions. Let's not forget the historic track record of inflating fiat currencies all the way down to their inherent worth of 0.00
  
 As for the blowhard CEO of JP Morgan (Jamie Dimon) , he has it backwards: It's FED Dollars that are a horrible store of value, and anyone with cash dollars parked in any banking institution is an even greater  fool's fool, as Jamie Dimon very well knows.

 The Banksters are all terrified of Bitcoin, and rightly so, because Bitcoin makes their scams of debt based fiat and fractional reserve banking fully obsolete. Mr. Dimon fully knows this, yet lies through his crooked bankster teeth and spins the truth into yet another diabolical lie. Never trust a Banker. Never, ever, trust a Banker. They have enslaved the world these last 100 years ever since they formed the Federal Reserve Bank. In fact for hundreds of years these parasites have fully enslaved the entire world through debt based usury. Well their time is up, their on a sinking ship, their schemes are fully doomed, and this time no one is going to be gullible enough to allow them to again enslave us again. Bitcoin is assuring these facts going forward no matter what, just in case anyone wonders...

 I have had a choice like everyone else: To sell my Bitcoins for cash, and then to keep the cash, or invest that cash into something else. Instead I find that my best current investment alternative has been and still is Bitcoin. I am fully in Bitcoin, and wont be getting out anytime soon even though I have already had stellar gains.

 So far, in the past 13 months, I am up hugely on my first bitcoins I came by. And it's the same for most of the rest that I came by from mining, trading and ever more purchases since then that are all up substantially.

 Of course I purchased in well before the Winter 2013 Price Surge, unlike many late comers that came during or after that period.

 All I can suggest to them and the current miners of all types is to not waver, but instead stand pat, be patient, don't panic sell, keep mining and keep "dollar cost averaging" your way into more Bitcoins, and the odds are your going to have very large gains too, eventually.

 It's the same for those currently mining with ASIC's. Even those currently mining with GPU's for alt. currencies whom then sell those for bitcoin. Eventually all those mining efforts will be very likely (but not assured) to display a positive return on investment. But not if one panic sells, or rushes to sell too soon.

 The next price surge for Bitcoin is apt to be in the $2000 to $6000 price range.

 That may sound unreasonable to many today, but so did the $1200 peak by last December as of about one year ago when the price of Bitcoin was only about $50. Hardly anyone thought we could gain so much so fast, no surprise then that we also had a huge price correction. But that appears to finally be ending as of the last few days. And now hopefully we will witness a steady, slow, march upwards, followed by one major price surge after another by the end of this year.

 Until the value of Bitcoin matures to it's realistic Mature pricing range in excess of $6000 to as high as maybe $30,000 or more I wont be in any rush to sell most of my own Bitcoins.

 I consider Bitcoins to be a vastly superior investment to anything else today, much more so than anything else. Otherwise I wouldn't still be safely holding them. It's truly is 'Digital Gold 2.0'

 Only those that need to cover mining expenses and must sell some of their Bitcoins should entertain any selling at all. And even then their much more apt to be wiser still to find alternative methods to cover those expenses rather than selling their 'Digital Gold 2.0' unless they must.

 Recently I have reviewed a lot of press coverage, and much of it was lies, some of it damn lies, and other was pure nonsense. And all of it from mostly those that are scared to death of losing their power and control over everyone else, or merely losing their position in the pecking order of things, or losing their careers or maybe social respectability. All due to a vastly superior form of currency and store of value called Bitcoin. Let that be a lesson for those that cannot read between the lines and fall prey to those lies, damn lies, and other nonsense.

 Bitcoin and other Cryptocurrency isn't for short term investors at this stage of the game. This is the Growth Stage with huge price volatility for at least another few years to come. Soon enough though it will be mature enough to safely switch in and out of Bitcoin at will, unless that is the fiat currencies are still crashing in value in comparison to hard assets such as Bitcoin, Gold, Oil, Real Estate, etc.

 The current banking schemes are all crumbling. Almost every nation on earth is horribly indebted. All because of the wickedly evil debt based fiat currency schemes of the Banksters.

 The present schemes wont last much longer.

 And Bitcoin is a real safe haven for those needing one. And that's everyone.

 For those that really don't understand, well you have a lot of catching up to do. For anyone that disagrees: Your flat out incorrect.

 
 And as always...


Caveat emptor - let the buyer beware

[komar]

tl;dr:
mine bitcoins to sold it when the price will go up
What a bullshit. You should just go at exchange and buy more bitcoins than you could mine with unprofitable ASIC miner.
Mining should be profitable, always.

[komar]

1. The graph shows income, not profit.

Ok, subtract $2 (two dollars) a day for electricity.
Oh, I already did it.

2. The graph shows income in dollars, not bitcoins.

So what?

3. Only people at the front of the pre-order list had any chance of making a profit.

Exactly it is.

[dogechode]

There was never any "mining for massive profit. That is just a legend. Mining has never been more than slightly profitable.

Well, that really depends. Based on what I know from historical data, it was significantly more profitable than it is now, in the past. However, all of that is assuming you are talking about mining and immediately selling. People who mined, held for a bit, and sold, could have made some MASSIVE profits.

I don't sell anything, I mine and hold. And hold. And hold. I'm waiting for a massive gain or nothing at all. It's pointless to me to mine and sell immediately for like what, $20/day profit and dropping every couple weeks?

[komar]

I don't sell anything, I mine and hold. And hold. And hold. I'm waiting for a massive gain or nothing at all. It's pointless to me to mine and sell immediately for like what, $20/day profit and dropping every couple weeks?

Why don't you just buy bitcoins on exchange and hold it? It's cheaper.

[Undone]

People who mined, held for a bit, and sold, could have made some MASSIVE profits.

I don't sell anything, I mine and hold. And hold. And hold. I'm waiting for a massive gain or nothing at all. It's pointless to me to mine and sell immediately for like what, $20/day profit and dropping every couple weeks?

But as odolvlobo points out very clearly, the gains come from holding those coins, not from mining them.

And since the majority buy their rigs in fiat, it begs the question of why one wouldn't just buy and hold bitcoin, as opposed to mining.

[odolvlobo]

1. The graph shows income, not profit.

Ok, subtract $2 (two dollars) a day for electricity.
Oh, I already did it.

2. The graph shows income in dollars, not bitcoins.

So what?

3. Only people at the front of the pre-order list had any chance of making a profit.

Exactly it is.

1. The graph doesn't subtract the cost of the equipment from the income.

2. Showing income in dollars confuses the issue because there are two factors: mining and exchange rate. The real judge of mining profitability is to compare the amount of BTC you pay to the amount you mine. If you can buy bitcoins for less than it costs to mine them, then mining is unprofitable.

3. Implying that there was a time when everyone made a lot of money from mining is a little far from the truth that only a few lucky (or well-connected) people were able to show a profit for a few months.

[komar]

"Hey, that guy did massive mining profit!" — "No, he was just lucky!"

[counter]

This is the kind of thing companies that makes these machines should be making people aware of IMO.  But they seem busy taking advantage of customers instead of having honest business practices. 

[dogechode]

I don't sell anything, I mine and hold. And hold. And hold. I'm waiting for a massive gain or nothing at all. It's pointless to me to mine and sell immediately for like what, $20/day profit and dropping every couple weeks?

Why don't you just buy bitcoins on exchange and hold it? It's cheaper.

Because I don't mine bitcoin. I got into mining altcoins. Some I have traded for bitcoin but I wouldn't say my majority holdings are btc - not by a long shot. Having mining equipment lets me speculate on many different coins. Naturally when I bought the equipment I was (and still am) gambling on making enough profit simply by mining, to profit over the cost of the equipment, in addition to any profit from price increases.

[Undone]

Having mining equipment lets me speculate on many different coins. Naturally when I bought the equipment I was (and still am) gambling on making enough profit simply by mining, to profit over the cost of the equipment, in addition to any profit from price increases.

Only in the same sense that having dollars that can be used to buy bitcoin on an exchange which is then exchanged for many different coins lets you speculate on many different coins.

I don't think that anybody is bashing mining here. The point is to drive home the principle of whether or not the initial investment capital could have yielded more wealth by simply buying coins.

Scrypt mining doesn't give any more flexibility to get moar coinz than does buying them with bitcoin. It might be enjoyable, it might be a good way to learn more about building a PC, etc. But it doesn't necessarily afford any benefits over buying coins. Especially since GPUs suck a lot of electricity, which also has to be factored into opportunity cost. Even the electricity used by ASIC gear is not negligible in the calculation.

[billysweird]

Stop pushing Minerscube 15 or whatever it is you're trying to sell to unsuspecting noobs.

I'm not pushing anything to anybody.
If it looks like pushing, maybe I should offer advertisment to minerscube’s guys?

Any pre-order you buy today will not break-even or take months/years.

This is why I wrote this: Minerscube 15 (1666 Mhash/s/$) will make profit for you if you'll buy it today
And "buy today" means "got today".
I don't know anything about pre-orders or delivery time. For me it's just a number, and this number looks good.

I mine for Bitcoin. I show what I run under the hood and what others who mine Bitcoin are up to.

[dogechode]

Having mining equipment lets me speculate on many different coins. Naturally when I bought the equipment I was (and still am) gambling on making enough profit simply by mining, to profit over the cost of the equipment, in addition to any profit from price increases.

Only in the same sense that having dollars that can be used to buy bitcoin on an exchange which is then exchanged for many different coins lets you speculate on many different coins.

I don't think that anybody is bashing mining here. The point is to drive home the principle of whether or not the initial investment capital could have yielded more wealth by simply buying coins.

Scrypt mining doesn't give any more flexibility to get moar coinz than does buying them with bitcoin. It might be enjoyable, it might be a good way to learn more about building a PC, etc. But it doesn't necessarily afford any benefits over buying coins. Especially since GPUs suck a lot of electricity, which also has to be factored into opportunity cost. Even the electricity used by ASIC gear is not negligible in the calculation.

Here is a perspective you may not have considered. Suppose you just buy bitcoins and then you start trading - either trading bitcoins as the price fluctuates or trading altcoins or some combination of both. You can potentially make a few mistakes and wipe out your investment. Then you have to buy more. However, if you are mining, you have a constant stream of coins coming in that you can trade, flip, etc. So it's a more passive way to keep increasing your holdings and/or recovering from your slip-ups without constantly going back to your bank account. The electricity cost isn't massive unless you have a lot of mining equipment. The amount of money you would spend to build a few megs of hashing power could easily be wiped out in one or two bad trading moves.

[Undone]

You're doing it again.

There's a perfectly parallel example to what you just described - buying X amount of coins, but only trading a small ratio of them.

Psychologically it may seem to be a benefit to you personally in the area of mitigating risk. But if you never break even on the original capital (plus electricity), it's a bad investment in hindsight. And I do understand where you're coming from; I have a 2 m/hash Scrypt rig that's been online since early December. And I live in a state that has some of the lowest electricity rates in the USA. The electricity costs are not negligible.

*Edit -Obviously the most redeeming quality of Scrypt mining on a PC is that the components have quality resale value. It definitely has that going for it.

[blackvoice]

You can only mine finite amount of bitcoins with ASIC miner

Real example: Avalon ASIC miner. Nowdays it can't mine shit for you. Despite it gave hundreds dollars a day to guys who bought it before May 2013.

Reason: the mining difficulty is rising up dramatically. See below.

The mining difficulty is rising up monotonously for ~20% every 2 weeks

Real example: this historical chart

http://divananalit.org/graphs/bitcoin-difficulty-changes.png
(this chart updates every hour; source: http://divananalit.org/#Bitcoin-mining-difficulty-change )

Reason: I don't know. It's just happening at least for last year. It's like a Moore's law.

You can easy calculate will your cex.io investment ever be in profit or not.

You can use simple formula of Infinite geometric series. For example, one GHS costs 0.0103 BTC. With current difficulty (6119726089.13) one GHS could mine 0.0011505 BTC per two weeks. If mining difficulty will rise up for 20% every two weeks, then reward will fall for 20% every two weeks, then the total amount of bitcoins we could mine with that GHS is:

0.0011505 / (1 - 0. = 0.0057525 BTC

But one GHS costs 0.0103 BTC — two times more expensive!

Conclusion: cex.io is a chump investment. Do not buy anything there.

You can reckon will your ASIC miner ever be in profit if you'll buy it today

I'll just show you two things: "Mhash/s/$" characteristic which you could see in this table and this chart:

http://divananalit.org/graphs/bitcoin-price-needed-to-cover-hardware-cost.png
(this chart updates every hour and depends on current mining difficulty; source: http://divananalit.org/#Will-my-mining-investment-ever-be-in-profit.3F )

What conclusions could we make?

• Avalon (50 Mhash/s/$) bought today will pay itself only if you sell all gained bitcoins for thousands of USD.
• TerraMiner IV (333 Mhash/s/$) is already unprofitable
• Minerscube 15 (1666 Mhash/s/$) will make profit for you if you'll buy it today even if bitcoin price will fall down to $300.

Thanks a lot, be careful, use your brans. And sorry for my shitty language — I wrote a post in russian and decided to share this with you.

These pictures are useful

Thank you for your hard work

[zolace]

I understand the halving part; less coins available per block. How is the difficulty determined? is it also increasing per block? Is it based on luck as well.