Did the dollar suddenly devalue vs. used 5970's?

[Electricbees]

Last week I sold all my 5830's off to finally upgrade to 5970's, and look what happened...

This has me raging on so many levels. I sold off a solid 2.1Ghash, so I could buy 1, count it, 1 750Mhash card at the current overinflated price.
And the BTC crash made my profits worth less too, so I can't even buy one card now.

Rage. That is all.

Why would you sell of 2.1 ghashs, just buy 5970s and pay em off as you're hashing power increases from 2.1gh/s , I mean I haven't been mining very long but if you covered you're initial investment on the 5830s there funding you're purchasing of a 5970.

About the eBay pricing, the value of the BTC going down would flood the market with 5970s, my logic is less value = less return on mining = people with 5970s who have enough of em, and are going to make the switch to fpga boards, will sell to salvage if the value is good enough ( $400+ imo is more then good enough lol considering these are paid of most likely by the original miner) which leads to some people trying to make even more of the uniformed. I am not saying anyone here is doing that, I am just saying some1 as new as me a ( a month old to the scene ) can see the 5970 was the card of choice and still has advantages in the gpu/to rig density etc, and now that its discontinued they can pick off newbies unaware of the main point the a 79xx series is out and easily available for 50-100$ on top of a $400 for used 5970.

In a nutshell, the 5970s became so rare, they could pull $400 minimum used, there then becomes the option to sell and replace with new hardware to those with many on hand, ie fpga in the battle to maximize w/hash or 79xx series both of which could see increase in mhashs based on software developments etc.

It would be sickening to think you could sell a 5970 for $620 you cover'd the cost on a 80w 833mh/s rig from butterfly but whoever pulls that one off is a slick rat indeed.

In my instance, I possess limited amperage with which to mine. I have 20a @ 120v, and was mining with three rigs. The move to 5970's was purely to maximize hash/watt ratings of my system. Although, my timing was absolutely shit.
Used the proceeds of mining to buy 5970's, and got the shit scammed out of me. (Anyone could have told you it would happen, the price seemed too nice...)
After that tanked, I tried to consolidate anyways, and the price skyrocketed. And now, here I am, mad...
I am strongly considering a couple bitforce singles, instead of punk-shit 18th hand cards, but only if 5970's stay WAY the fuck up in price for a while yet.

Waiting out the market is tough when you have wattage sitting around, not utilized. Gotta get my hands on something soon, it's cold as antarctica in this dorm.

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[Davyd05]

I figured you' had a limit, that or heat/space limitations.

Yeah, but still I wouldn't sell my rig till my next one was waiting to start up is what I was saying but yeah, sometimes the world just give you a cup of "fuck you" when it seemed like the best option.

The FPGA seems the way to go, I mean once we hit a 25 BTC per block, the hashing power needed will probably go up unless as I've heard you see a shit load of people say I'm out cause there on gpu's that make it way to costly at the power the consume, hence the fpga comment still being relevant even if a bunch of people got the fuck out and some people stuck around with a gpu rigs as they knew a bunch of people would get out at first sign of losses, the fpga systems that could match them will be so much more power efficient by then they will dominate eventually. IMO

Nothing in my statement is a fact, as far as I know, well the 25 btc per block eventuality is a fact the results are up in the air.

[muyuu]

If you're looking for short term profitability (or any term really), getting mining hardware right now is nonsense at BTC < US$5. The alternatives right now are getting coins, or getting nothing. Coins right now are waaay below hardware amortisation costs, even leaving energy costs aside - also leaving risks of faulty hardware aside. The only reason to invest in this right now is to learn how it's done.

[Davyd05]

can say its why I haven't bought anything myself, but if the BFL does inflate in price due to demands, buying one or 2 now would be nice if the hashing rate dropped due to current lows, its what 4.5usd per btc, last night in it broke even in 2/3 of year 9months time frame cause who knows what will happen at the 25btc block era, today it takes over a year and at lost still. That's with it pushing out 800+mh/s @ .12 usd p/kWh so as you said nothing seems worthwhile. However those rocking fpga systems right now must be hoping people take breaks in hopes of a rebound, unless people want to continue to waste electricity in certain situations I guess they could see future value making it worth operating a loss for a certain time frame.

[muyuu]

can say its why I haven't bought anything myself, but if the BFL does inflate in price due to demands, buying one or 2 now would be nice if the hashing rate dropped due to current lows, its what 4.5usd per btc, last night in it broke even in 2/3 of year 9months time frame cause who knows what will happen at the 25btc block era, today it takes over a year and at lost still. That's with it pushing out 800+mh/s @ .12 usd p/kWh so as you said nothing seems worthwhile. However those rocking fpga systems right now must be hoping people take breaks in hopes of a rebound, unless people want to continue to waste electricity in certain situations I guess they could see future value making it worth operating a loss for a certain time frame.

Hardware doesn't get any more expensive with time. Right now it makes sense to spend the money in coins now and buy the hardware later, this applies to any tech given current difficulties and BTC valuation. Or, if you think valuation is only going down short/mid-term, just waiting.

[cuz0882]

This is going to change, I see 350-400 dollar 5970's in a near future. Total hashrate of the network is dropping with bitcoins value. It's still the best choice even at 500-600 dollars. FPGA is a terrible investment. It's value, if bitcoin fails will be nothing. At least gpu's are worth something. I will stick to paying a extra 60 cents a day. Although bitcoin prices will fall more as FPGA's are produced. Reminds me of the scientists trying to  separate the gold from ocean water. They would not really be doing us a favor if they did figure it out.

[DeathAndTaxes]

If you're looking for short term profitability (or any term really), getting mining hardware right now is nonsense at BTC < US$5. The alternatives right now are getting coins, or getting nothing. Coins right now are waaay below hardware amortisation costs, even leaving energy costs aside - also leaving risks of faulty hardware aside. The only reason to invest in this right now is to learn how it's done.

Really?

HD 5970 @ $350, 750 MH/s
1.3 million difficulty, 50 BTC per block

Lets guesstimate a 24 month amortization of hardware. That puts the monthly hardware cost at $14.58

@ 750 MH/s, 1.3 million difficulty, and 50 BTC per block it will produce ~17.41 BTC per month.
For Bitcoin to be below the amortized hardware it would need to be trading below $14.58/17.41 = $0.83.


Now lets take worst case scenario.
$450 HD 5970 (I recommend nobody pay that much).  Entire system cost (3x5970) = $1800.
Effective lifecycle of only 12 months.  Monthly hardware cost = $150

Revenue = 52.23 BTC per month. $150/52.23 = $2.87 per BTC.

[muyuu]

If you're looking for short term profitability (or any term really), getting mining hardware right now is nonsense at BTC < US$5. The alternatives right now are getting coins, or getting nothing. Coins right now are waaay below hardware amortisation costs, even leaving energy costs aside - also leaving risks of faulty hardware aside. The only reason to invest in this right now is to learn how it's done.

Really. 

HD 5970 @ $350, 750 MH/s
1.3 million difficulty, 50 BTC per block

Lets guesstimate a 24 month amortization of hardware. That puts the monthly hardware cost at $14.58

@ 750 MH/s, 1.3 million difficulty, and 50 BTC per block it will produce ~17.41 BTC per month.
For Bitcoin to be below the amortized hardware it would need to be trading below $14.58/17.41 = $0.83.


Now lets take worst case scenario.
$450 HD 5970 (I recommend nobody pay that much).  Entire system cost (3x5970) = $1800.
Effective lifecycle of only 12 months.  Monthly hardware cost = $150

Revenue = 52.23 BTC per month. $150/52.23 = $2.87 per BTC.

50 BTC per block ends in 10 months. Then it's 25 BTC per block.

Assume difficulty grows per year just half as much it's grown the least growing year to date.

Consider the rest of the computer being worth anything at all (esp. a power supply capable of running 3/4 5970's).

If you want to consider electricity at all that's up to you. I'd expect nobody to really care that much, but if you run a 4x5970 operation someone is bound to ask questions.

[DeathAndTaxes]

50 BTC per block ends in 10 months. Then it's 25 BTC per block.

Assume difficulty grows per year just half as much it's grown the least growing year to date.

Consider the rest of the computer being worth anything at all (esp. a power supply capable of running 3/4 5970's).

If you want to consider electricity at all that's up to you. I'd expect nobody to really care that much, but if you run a 4x5970 operation someone is bound to ask questions.

Your claim was this:

" Coins right now are waaay below hardware amortisation costs, even leaving energy costs aside "

The claim is 100% false even if you we use ridiculous assumptions like $450+ per GPU, and a 12 month lifespan the ammortized hardware costs are $2.87 per BTC.

I didn't say anyone SHOULD buy new hardware.  Honestly I don't really care if they do or not. If they aren't doing their own analysis they will fail anyways.  

I was just correcting an obviously false claim made by you.

You made a false claim.  I refuted it.
Can we move on now?
 

[muyuu]

50 BTC per block ends in 10 months. Then it's 25 BTC per block.

Assume difficulty grows per year just half as much it's grown the least growing year to date.

Consider the rest of the computer being worth anything at all (esp. a power supply capable of running 3/4 5970's).

If you want to consider electricity at all that's up to you. I'd expect nobody to really care that much, but if you run a 4x5970 operation someone is bound to ask questions.

Your claim was this:

" Coins right now are waaay below hardware amortisation costs, even leaving energy costs aside "

The claim is 100% false even if you we use ridiculous assumptions like $450+ per GPU, and a 12 month lifespan the ammortized hardware costs are $2.87 per BTC.

I didn't say anyone SHOULD buy new hardware.  Honestly I don't really care if they do or not. If they aren't doing their own analysis they will fail anyways.  

I was just correcting an obviously false claim made by you.

You made a false claim.  I refuted it.
Can we move on now?
 

Let me get this straight. We know for sure (unless a massive change in the blockchain is introduced) that BTC creation rate will be cut in half in 10 months. You assume for some reason it's not, calculating amortisation in 2 years.
We have a history of strong difficulty growth, but for some reason you assume it will remain the same or lower.

Let's not even enter into any other considerations.

You seriously claim to have refuted anything?

Lots of people must be doing their analysis wrong so 5970 are reaching these prices. Because, for gaming, they'd be a horrible deal compared to 6870s in crossfire, for instance.

We can move on when you wish, but if you think a second hand 5970 is a better deal than just getting the coins at current prices (of both coins and 5970s) then I have a bridge I want to sell.

See you around...

[DeathAndTaxes]

Let me get this straight. We know for sure (unless a massive change in the blockchain is introduced) that BTC creation rate will be cut in half in 10 months. You assume for some reason it's not, calculating amortisation in 2 years.
We have a history of strong difficulty growth, but for some reason you assume it will remain the same or lower.

Ok.
1) I included the susidy cut (but it doesn't have much effects because of #2)
2) I gave you the most massive beneift of doubt in assumming the card will only last 12 months (thus subsidy cut only affects 2 of them)
3) Difficulty goes up and down but stays rather stable relative to price.  Nominal difficulty has no meaning.  Price/difficulty has remained in a range for last 6 months or so.  It is unlikely that will change.  Why?

If price/difficulty ratio skyrockets, people will build new rigs which drives up difficulty and normalizes price/difficulty ratio.  If price/difficulty ratio falls significantly the most marginal miners will shutdown their rigs and that also normalizes price/difficulty.



Difficulty rising is irrelevant if price rises.  If prices double (and remain at elevated levels) then difficulty likely will double but miners will be making the same amount (in USD) at difficulty 2.6 million as they are now at 1.3 million.   Likewise if prices continue to fall then difficulty will fall and miner's won't be making any more (in USD) at difficulty 800K as they are now at 1.3 million

As you can see above since Nov despite multiple crashes and booms 1GH/s has earned between $2.0 and $6.0 and spend most of that time between $3 & $4.  So yes we can make projections on revenue.  Not on PRICE ALONE or DIFFICULTY ALONE but on REVENUE per GH/s.

So giving you the most massive beneift of the doubt and using ultra conservative and unrealistic assumptions:
A) system's effective lifecycle is only 12 months
B) the system's value after mining is $0.00
C) person pays a stupid $450 per GP.


Your claim is still false.  You aren't even close.
"Coins right now are waaay below hardware amortisation costs, even leaving energy costs aside "

At that is with unrealistic assumptions designed to give you the benefit of the doubt.  With more realistic numbers your claim falls even more short of the mark.

We can move on when you wish, but if you think a second hand 5970 is a better deal than just getting the coins at current prices (of both coins and 5970s) then I have a bridge I want to sell.

Strawman.  I never said "good deal" I said your claim was false.  

[muyuu]

Yep, it's wrong if we disregard that you need actual time to amortise the card. About difficulty increases being conservative or not, we will see. This far difficulty increases have consistently beaten the market. It took a massive collapse to bring difficulty down somewhat.

Otherwise, then make your own estimations...

Will come back in 24 months and see if a system consisting of 4x5970 bought today would have paid for itself. Deal? With and without electricity costs.

I maintain that cards bought today won't pay for themselves in 2 years. This is what amortisation in 2 years means. Not some abstract notion of extending current time and adding cards arbitrarily, that will obviously always work if electricity is free.

[DeathAndTaxes]

Yep, it's wrong if we disregard that you need actual time to amortise the card. About difficulty increases being conservative or not, we will see. This far difficulty increases have consistently beaten the market. It took a massive collapse to bring difficulty down somewhat.

Once again and this time I will use simple words because you seem to have a reading comprehension problem.

NOMINAL DIFFICULT = UTTERLY WORTHLESS STAT FOR A MINER.
All that matters is relative difficulty (price/difficulty) which can also be expressed as daily revenue.

Will come back in 24 months and see if a system consisting of 4x5970 bought today would have paid for itself. Deal? With and without electricity costs.  I maintain that cards bought today won't pay for themselves in 2 years. This is what amortisation in 2 years means. Not some abstract notion of extending current time and adding cards arbitrarily, that will obviously always work if electricity is free.

Which has nothing to do with this:
"Coins right now are waaay below hardware amortisation costs, even leaving energy costs aside "

Not sure why you are backtracking to include electricity.  I never said it was a) a good idea to buy, or b) that rig would be profitable.

I know this is very hard for you to understand BUT I SIMPLE CORRECTED YOUR FLAWED CLAIM ABOVE.  The claim above has nothing to do with electricity.   Feel free to have the last word, due to ignore I won't be able to see it.

[muyuu]

Yep, it's wrong if we disregard that you need actual time to amortise the card. About difficulty increases being conservative or not, we will see. This far difficulty increases have consistently beaten the market. It took a massive collapse to bring difficulty down somewhat.

Once again and this time I will use simple words because you seem to have a reading comprehension problem.

NOMINAL DIFFICULT = UTTERLY WORTHLESS STAT FOR A MINER.
All that matters is relative difficulty (price/difficulty) which can also be expressed as daily revenue.

Will come back in 24 months and see if a system consisting of 4x5970 bought today would have paid for itself. Deal? With and without electricity costs.  I maintain that cards bought today won't pay for themselves in 2 years. This is what amortisation in 2 years means. Not some abstract notion of extending current time and adding cards arbitrarily, that will obviously always work if electricity is free.

Which has nothing to do with this:
"Coins right now are waaay below hardware amortisation costs, even leaving energy costs aside "

Not sure why you are backtracking to include electricity.  I never said it was a) a good idea to buy, or b) that rig would be profitable.

I know this is very hard for you to understand BUT I SIMPLE CORRECTED YOUR STUPIDLY FLAWED CLAIM ABOVE.

The claim above has nothing to do with electricity.  Nothing.  Feel free to have the last word due to ignore I won't be able to see it.

I said I will come back and do both, with and without electricity. Go back and reread it.

I had enough of your rudeness. Talk to you in 24 months, go learn some manners in the meanwhile.

[dropt]

Yep, it's wrong if we disregard that you need actual time to amortise the card. About difficulty increases being conservative or not, we will see. This far difficulty increases have consistently beaten the market. It took a massive collapse to bring difficulty down somewhat.

Once again and this time I will use simple words because you seem to have a reading comprehension problem.

NOMINAL DIFFICULT = UTTERLY WORTHLESS STAT FOR A MINER.
All that matters is relative difficulty (price/difficulty) which can also be expressed as daily revenue.

Will come back in 24 months and see if a system consisting of 4x5970 bought today would have paid for itself. Deal? With and without electricity costs.  I maintain that cards bought today won't pay for themselves in 2 years. This is what amortisation in 2 years means. Not some abstract notion of extending current time and adding cards arbitrarily, that will obviously always work if electricity is free.

Which has nothing to do with this:
"Coins right now are waaay below hardware amortisation costs, even leaving energy costs aside "

Not sure why you are backtracking to include electricity.  I never said it was a) a good idea to buy, or b) that rig would be profitable.

I know this is very hard for you to understand BUT I SIMPLE CORRECTED YOUR STUPIDLY FLAWED CLAIM ABOVE.

The claim above has nothing to do with electricity.  Nothing.  Feel free to have the last word due to ignore I won't be able to see it.

I said I will come back and do both, with and without electricity. Go back and reread it.

I had enough of your rudeness. Talk to you in 24 months, go learn some manners in the meanwhile.

Except he's right and you're wrong.

[muyuu]

Except he's right and you're wrong.

Very intelligent post, adds a lot  

To calculate amortisation in x months, you need to assume an scenario. His is massively more optimistic than mine, simple as that.

I argue than difficulty has been consistently beating valuation for several months and it will continue to do so.

Make your numbers.

As I said, I will come back in 24 months since that post and I we'll see if a 5970 bought then was profitable or not (with and without free electricity, both assumptions). The free electricity assumption doesn't really hold for a massive operation, though. That would be for a simple 1 or 2 HD 5970 setup. But again, I don't think it will even be effective then. People will mine at a loss, and I have nothing against that either.

Take into account that we're assuming bitcoins to be converted regularly, so holding them and waiting for a revaluation wouldn't be an option. This is so because we are comparing for the sake of the following decision: buy coins or buy a 5970.

[film2240]

I just looked at prices of HD5970 in UK :http://www.ebay.co.uk/sch/i.html?_trkparms=65%253A12%257C66%253A2%257C39%253A1%257C72%253A5788&rt=nc&_nkw=HD5970&_trksid=p3286.c0.m14&_sop=2&_sc=1

They tend to start from over £260 (it sounds cheap when you convert to USD compared to the US ebay site mentioned in this thread.)

Still those cards are pretty damn expensive.The prices include 20% VAT (tax) as well.

You can try buying them from UK and shipping them over (even with the added shipping fee from UK,it's be cheaper than the US eBay links the OP mentioned I think)