Define "ROI"... "Profit"...

[Hqen2000]

I think there is too much of a focus on "ROI". Do you mine as an investment? Do you expect to instantly go from BTC to USD? Mining generates a certain amount of BTC. How that translates to fiat at the moment is a constantly moving target (just look at a 6 month BTC price chart). So why the big focus on "ROI" are you investing or are you looking to gain instant revenue?

Last time I checked investing included speculating on future earnings....

[1715184080]

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[counter]

Most likely a mixed bag of reasons for why people mine.  I'd think people usually have to make sure their initial investment is taken off the table as far as risk goes in my opinion.  I'd suspect most people are of the opinion that the ROI of Bitcoin will out perform a Bitcoin cashed out for immediate profit but then there is an amount of risk add into the equation. 

[brian_23452]

I think there is too much of a focus on "ROI". Do you mine as an investment? Do you expect to instantly go from BTC to USD? Mining generates a certain amount of BTC. How that translates to fiat at the moment is a constantly moving target (just look at a 6 month BTC price chart). So why the big focus on "ROI" are you investing or are you looking to gain instant revenue?
Last time I checked investing included speculating on future earnings....

Well I guess there are probably some hobbyist miners out there, but a person spending 10s of BTC on mining equipment is probably looking to make money sure.  There is a focus on ROI because a mining device does exactly one thing, generate revenue.  Obviously if it generates less revenue than it costs to purchase there is no reason to purchase it.  I'm not sure what your mentioning of fiat has to do with it though, if you spend say, 10BTC on mining equipment, you hope to make more than 10BTC with it (ignoring operational costs for the moment), otherwise you may as well just keep the BTC.  I think this is fairly intuitively obvious.
It isn't a question of instant revenue though, it is simply the nature of how these things work.  If you buy say, GOLD, and 3 months or a year later haven't profited, it could still turn out to be a good investment because it could still increase in value.  If you purchase mining equipment and 3 months later it hasn't made you a profit, that's it, it never will. 

[DrG]

I think there is too much of a focus on "ROI". Do you mine as an investment? Do you expect to instantly go from BTC to USD? Mining generates a certain amount of BTC. How that translates to fiat at the moment is a constantly moving target (just look at a 6 month BTC price chart). So why the big focus on "ROI" are you investing or are you looking to gain instant revenue?
Last time I checked investing included speculating on future earnings....

Well I guess there are probably some hobbyist miners out there, but a person spending 10s of BTC on mining equipment is probably looking to make money sure.  There is a focus on ROI because a mining device does exactly one thing, generate revenue.  Obviously if it generates less revenue than it costs to purchase there is no reason to purchase it.  I'm not sure what your mentioning of fiat has to do with it though, if you spend say, 10BTC on mining equipment, you hope to make more than 10BTC with it (ignoring operational costs for the moment), otherwise you may as well just keep the BTC.  I think this is fairly intuitively obvious.
It isn't a question of instant revenue though, it is simply the nature of how these things work.  If you buy say, GOLD, and 3 months or a year later haven't profited, it could still turn out to be a good investment because it could still increase in value.  If you purchase mining equipment and 3 months later it hasn't made you a profit, that's it, it never will. 

And that's the single best reason for risk adverse people to stay away.  If you buy BTC on an exchange you can always dump it back for fiat (at whatever profit/loss) and just deal with a 3-10 day delay on not having fiat.

If you buy mining equipment you're committed until you can find a buyer to ship it to.  If you have cheap power you could always offer a lease but those can be a headache.

[BTC_Fundamentals]

Mine BTC only if you have free power, and even then it can not reach ROI, not to mention profit.

[TheJuice]

You can always buy btc instead. Hence buying mining equipment is an investment. I always talk in btcs, so if i spend 10 btc, my return on investment is based in btc. This usdbtc is irrelevant.

[JCNC]

A lot of people on here love to slate people who only mine for ROI or some kind of return. I personally mine for the enjoyment because it's all really interesting. But at the same time, I expect to see a return, otherwise it isn't a very successful project is it?

[Biffa]

People often use ROI in the wrong context especially in mining.

ROI is a measure of efficiency. It has a simple formula:

ROI = (Gains – Cost)/Cost

So in our situation it would be BTC mined - cost of miner / cost of miner

Anything you earn from mining is a Return On your Investment, even 0.000001BTC is a ROI

It will be a negative ROI until you reach equilibrium with your investment cost. Then ROI becomes zero (e.g. you bought a miner for 1BTC, you mined 1BTC) the ROI equation of (1BTC - 1BTC)/1BTC equals 0

Once your return equals the amount you invested you have reached Break Even or zero ROI

Anything over Break Even is Profit or positive ROI

[ChuckBuck]

Easy, BTC IN, BTC RETURN.  Never ever calculate in Fiat.

We're all in it for the coins, so we should think, spend, and calculate in this currency.

If the fiat value of BTC goes way up, that's a great bonus!   

[DubFX]

Easy, BTC IN, BTC RETURN.  Never ever calculate in Fiat.

We're all in it for the coins, so we should think, spend, and calculate in this currency.

If the fiat value of BTC goes way up, that's a great bonus!   

That's true and all great but if it goes the way down then it's a loss...

[ChuckBuck]

Easy, BTC IN, BTC RETURN.  Never ever calculate in Fiat.

We're all in it for the coins, so we should think, spend, and calculate in this currency.

If the fiat value of BTC goes way up, that's a great bonus!   

That's true and all great but if it goes the way down then it's a loss...

Doesn't matter, if fiat value goes way down to a nickel, I doubt you'd sell.  You'd probably load up!

I think we'd all buy like crazy, and you know what happens to an instrument when people BUY BUY BUY!   

[ThirtyQuidKid]

I'll jump in from a noobs point of view.

I also take into consideration the potential value of the miner after I'm finished with it. I have been amased by how much I got for my antminer U1's that I have just sold. I had 10 of them, each cost £20 when purchased. Each sold for between £12-£14 in the last few days. Once I added that to my ROI calc I was up a fair bit with BTC earned and return on my cash down payment. Now all of my cash is back I now calculate just in BTC and assume that I will get 50% of my original purchase price back from any equipment.

I'll just have to hope I didn't sell to any scammers on E bay 

This may not be correct way to look at it but it helps me to justify(in my head) the expenditure.

[bitgeek]

Back when I tried asics for the first time everybody said you can't have ROI with them. I bought some USB miners anyway and mined despite the rising difficulty, 5 months later I sold the miners to people who were into sha altcoin mining for about 1/4 of their initial price, but in the meantime Bitcion was worth over 6 times more

[ShakyhandsBTCer]

I think there is too much of a focus on "ROI". Do you mine as an investment? Do you expect to instantly go from BTC to USD? Mining generates a certain amount of BTC. How that translates to fiat at the moment is a constantly moving target (just look at a 6 month BTC price chart). So why the big focus on "ROI" are you investing or are you looking to gain instant revenue?
Last time I checked investing included speculating on future earnings....

Well I guess there are probably some hobbyist miners out there, but a person spending 10s of BTC on mining equipment is probably looking to make money sure.  There is a focus on ROI because a mining device does exactly one thing, generate revenue.  Obviously if it generates less revenue than it costs to purchase there is no reason to purchase it.  I'm not sure what your mentioning of fiat has to do with it though, if you spend say, 10BTC on mining equipment, you hope to make more than 10BTC with it (ignoring operational costs for the moment), otherwise you may as well just keep the BTC.  I think this is fairly intuitively obvious.
It isn't a question of instant revenue though, it is simply the nature of how these things work.  If you buy say, GOLD, and 3 months or a year later haven't profited, it could still turn out to be a good investment because it could still increase in value.  If you purchase mining equipment and 3 months later it hasn't made you a profit, that's it, it never will. 

And that's the single best reason for risk adverse people to stay away.  If you buy BTC on an exchange you can always dump it back for fiat (at whatever profit/loss) and just deal with a 3-10 day delay on not having fiat.

If you buy mining equipment you're committed until you can find a buyer to ship it to.  If you have cheap power you could always offer a lease but those can be a headache.

This is correct for ROI based solely from mining revenues. If you are close to ROI after 3 months, you could, in theory sell the miner and get ROI with those proceeds.

IMO reselling (or selling) miners is the most (only) profitable way to use miners. I remember back late last year the new KnC miners were selling for $25k+ on eBay when KnC sold them for less then half that

[Rannasha]

Back when I tried asics for the first time everybody said you can't have ROI with them. I bought some USB miners anyway and mined despite the rising difficulty, 5 months later I sold the miners to people who were into sha altcoin mining for about 1/4 of their initial price, but in the meantime Bitcion was worth over 6 times more

And what would your profits have looked like if instead of buying USB miners you would have bought Bitcoin instead at the same time?

Exactly.

[DrG]

Back when I tried asics for the first time everybody said you can't have ROI with them. I bought some USB miners anyway and mined despite the rising difficulty, 5 months later I sold the miners to people who were into sha altcoin mining for about 1/4 of their initial price, but in the meantime Bitcion was worth over 6 times more

You made an ROI in fiat, but not in BTC - which is not bad.  But the whole point of people getting involved with mining (at least from the economic side) is to acquire more BTC.

[DrG]

People often use ROI in the wrong context especially in mining.

ROI is a measure of efficiency. It has a simple formula:

ROI = (Gains – Cost)/Cost

So in our situation it would be BTC mined - cost of miner / cost of miner

Anything you earn from mining is a Return On your Investment, even 0.000001BTC is a ROI

It will be a negative ROI until you reach equilibrium with your investment cost. Then ROI becomes zero (e.g. you bought a miner for 1BTC, you mined 1BTC) the ROI equation of (1BTC - 1BTC)/1BTC equals 0

Once your return equals the amount you invested you have reached Break Even or zero ROI

Anything over Break Even is Profit or positive ROI

Yeah this has been mentioned many times before.  Many of us know what ROI is, it's just easier to type ROI rather than 0 ROI --> + ROI.  There's no abbreviated icon on this forum for it and it's understood that ROI means get back what you paid since all negative ROIs are called loss here   Maybe we should call it PROI (positive ROI).

[KiddAvent]

maybe so much people thinking make a 'mining' as an investment,
but maybe not for a trader,
so,when we are put our money to something,ofcourse we want it back,especially when we have a profit,
ofcourse that's a humanity,
right or not, every people have a different view,

[lajz99]

Mine BTC only if you have free power, and even then it can not reach ROI, not to mention profit.

Seems like you need to go back and learn the "fundamentals"...just an FYI - YOU'RE WRONG