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Author Topic: If you're thinking buying mining hardware, read this first  (Read 88711 times)
njloof
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May 05, 2011, 10:01:37 PM
 #141

It's amusing to me...in reading this thread, you would think that there is absolutely no use for a high-end graphics card other than Bitcoin mining. This doesn't seem like 100% solid logic.

If you're a gamer looking for a new card, then by all means go for it! Bitcoin mining would effectively be a discount on money you would have spent anyway. No one will argue this.

This thread isn't for these people. This thread is for the non-gamers snatching up GPUs and considering building second computers (motherboard, CPU, RAM, PSU, etc.) for them.

100% logic here.

Well, if you're looking for a gaming thread, you're on the wrong site.

I think the comparison is false regardless. Currency speculation has as little to do with mining as buying pork bellies on the commodity exchange has to do with farming hogs.
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Sukrim
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May 05, 2011, 10:06:01 PM
 #142

I think the comparison is false regardless. Currency speculation has as little to do with mining as buying pork bellies on the commodity exchange has to do with farming hogs.

This thread is about if it still pays off to buy a new farm + some land and start to breed pigs, if the food will be 2% more expensive each day. Wink

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May 05, 2011, 10:09:52 PM
 #143

I think the comparison is false regardless. Currency speculation has as little to do with mining as buying pork bellies on the commodity exchange has to do with farming hogs.

This thread is about if it still pays off to buy a new farm + some land and start to breed pigs, if the food will be 2% more expensive each day. Wink

Depends. If I can either send the pigs to slaughter when I'm done or put tutus on them and make them join the circus...well, you get it.

I'm the sort that would probably keep them all as pets and name them.

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May 06, 2011, 03:20:41 AM
 #144

I'm not a betting individual...I get queasy buying scratch tickets. I sincerely hope you are wrong, though. Sad They did not have the same ethos that a lot of the people here do.

Not only that but a LOT of them were woefully misinformed and they did not even show the willingness to educate themselves a bit before they open their mouth. Also many of them exhibited that idiotic "if it's new it must be a scam or something must be wrong.." attitude.

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May 06, 2011, 03:24:38 AM
 #145

I think the comparison is false regardless. Currency speculation has as little to do with mining as buying pork bellies on the commodity exchange has to do with farming hogs.

This thread is about if it still pays off to buy a new farm + some land and start to breed pigs, if the food will be 2% more expensive each day. Wink

Depends. If I can either send the pigs to slaughter when I'm done or put tutus on them and make them join the circus...well, you get it.

I'm the sort that would probably keep them all as pets and name them.

This little piggy went to the market..this other little piggy wasted his time in bars and got wasted all day..and this other little piggy built himself a bunch of rigs and got rich mining bitcoins...Tongue

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May 07, 2011, 06:52:24 AM
 #146

JJG, thanks for providing this analysis. Splendid work. I was just wondering today if there was any value in doing any hardware investment given the astronomical hash rate increases. You saved me the effort of running the numbers. Much appreciated.

Also very pleased to see you and tomcollins successfully defend logical reasoning in this thread.  One doesn't see that work out very often on the internet.  Wink

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JJG
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May 07, 2011, 01:38:00 PM
 #147

JJG, thanks for providing this analysis. Splendid work. I was just wondering today if there was any value in doing any hardware investment given the astronomical hash rate increases. You saved me the effort of running the numbers. Much appreciated.

Also very pleased to see you and tomcollins successfully defend logical reasoning in this thread.  One doesn't see that work out very often on the internet.  Wink

Thanks for the kind words. I'd still suggest you build your own simple models and check my reasoning if you're interested in the economics of it. The numbers are interesting, to say the least. Plus, the more eyes and models we have on a problem the better we can understand it.

On another note, it looks like we're due for a stunning 40% difficulty increase in 2.5 days! If anyone did order hardware for mining, I hope it's not still in transit over the weekend.
njloof
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May 07, 2011, 03:27:30 PM
 #148

I appreciate your work too, JJG -- raising all of the risk factors of mining is very helpful, and every market needs its contrarian Smiley
stillfire
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May 07, 2011, 05:22:09 PM
 #149

To those who think JJG is somehow a "sock puppet" of Vladimir: that makes very little sense. Vladimir is in the business of leasing mining hardware, based on the idea that your opportunity cost might be high so it could be cheaper to outsource.

When mining is unprofitable, his business will be less attractive.

Note that this is not meant to advice for or against mining contracts. If you run the numbers and it turns out that the average difficulty over the next 4 months will be at such a level you'll make more coins, at today's value, than the price, with interest, for 4 months of a contract, you could choose to do that. Especially if it'd be expensive to set up your own shop. Vladimir can reap the benefits of 'mass production' to some extent and if your opportunity cost is high you might actually make more money using contracts during good times than doing it yourself.

My point is merely that you would not see Vladimir arguing against the profitability of mining.

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JJG
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May 07, 2011, 06:04:36 PM
 #150

Thanks for the support. This is certainly a nice change from a week ago when I was quite the villain. Smiley

I still encourage everyone to run their own projections, models, and numbers. Just be realistic about it, and most importantly don't forget to factor in rising difficulty!
bitcoinharvester
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May 07, 2011, 06:11:42 PM
 #151

Let's just hope the price follows the uptrend with the difficulty.  It has historically up to this point.
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May 07, 2011, 07:20:14 PM
 #152

Let's just hope the price follows the uptrend with the difficulty.  It has historically up to this point.

That without a doubt is the big hope of all bitcoin miners, but it doesn't necessarily have to be so. My gut feeling is that we will see another rally as soon as the next difficulty rate increase comes around.

bitcoinharvester
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May 07, 2011, 07:56:23 PM
 #153

Sounds about right to me.  Some hype in the media as well driving some of the market.
If you look at the charts the picture is fairly clear (at least until some outside entity tries to cause problems).
I say KEEP ON MINEN!!
Grinder
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May 07, 2011, 08:24:24 PM
 #154

Let's just hope the price follows the uptrend with the difficulty.  It has historically up to this point.
No, generally the difficulty follows the price, which follows the level of publicity Bitcoin gets in the media.
bitcoinharvester
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May 07, 2011, 08:27:00 PM
 #155

That's perfect!
As long as the price goes up before the difficulty the miners are in the money.
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May 07, 2011, 09:18:03 PM
 #156

That's perfect!
As long as the price goes up before the difficulty the miners are in the money.
Unfortunately there's no guarantee for that. In February/March the price fell almost 50% from the top while the difficulty tripled. Unless there is a regular flow of publicity in big media outlets the difficulty will rise much more than the price.
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May 07, 2011, 10:39:00 PM
 #157

Bitcoin hasn't even had it's first publicity in a "big" media outlet yet.
The point is that the publicity has to get bigger and bigger to feed the exponential growth that is required to keep the difficulty at bay.
tomcollins
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May 08, 2011, 04:12:52 PM
 #158

Bitcoin hasn't even had it's first publicity in a "big" media outlet yet.
The point is that the publicity has to get bigger and bigger to feed the exponential growth that is required to keep the difficulty at bay.

Mining just needs to get more efficient.  You don't need that much more attention.  Some technological breakthrough similar to GPU mining when it came out would destroy the difficulty.  New cards that are more efficient could come out.  There are a lot of things that can make difficulty grow fast.
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May 08, 2011, 04:33:49 PM
 #159

Mining just needs to get more efficient.  You don't need that much more attention.  Some technological breakthrough similar to GPU mining when it came out would destroy the difficulty.  New cards that are more efficient could come out.  There are a lot of things that can make difficulty grow fast.
That would give the opposite effect of what the messages I responded to were predicting. I'm saying that difficulty will increase almost no matter what happens.
tomcollins
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May 08, 2011, 10:47:52 PM
 #160

Mining just needs to get more efficient.  You don't need that much more attention.  Some technological breakthrough similar to GPU mining when it came out would destroy the difficulty.  New cards that are more efficient could come out.  There are a lot of things that can make difficulty grow fast.
That would give the opposite effect of what the messages I responded to were predicting. I'm saying that difficulty will increase almost no matter what happens.

An extreme price drop will make difficulty get easier, but besides that, I agree.
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