If you had $5000 to invest right now: Coins or Hardware? Whats your rationale?

[Fuzzy]

As the topic states, if you had $5000 that you wanted to invest, would you buy coins outright, or mining hardware? What and why? I'm sure a few people on these boards are facing a similar conundrum.


EDIT:

This calculation is assuming:

• $5000 worth of "MiniRig Value" hardware
• No Delivery Wait Time
• No Electricity cost
• Difficulty increase of 5% every 13 days
• Block split in 210 days
• 1000 BTC bought today at $5 ea

"Growth factor" should read "Daily reward multiplier"


EDIT: This is not an attack on people buying/making hardware or bitcoins. I'm looking for a logical discussion.
I am fully aware that a 5% difficulty increase cannot be/is impossible to guarantee/foresee, but it's the best estimate I can come up with.

[the joint]

For me and my individual situation, the answer is hardware, without hesitation.

Edit:  Zero electric cost to me.

[check_status]

Right now I would buy coin and look for somewhere around $0.25 per BTC to sell at, study the markets to see when to sell and which price. Buy hardware from your profit.

[Astro]

I'd invest it all in Matthew.  What could go wrong?

[check_status]

I'd invest it all in Matthew.  What could go wrong?

Are more masks a good thing?

[proudhon]

With $5000 I'd go short on bitcoinica right now.  Oh, wait...

[brunozisterer]

Buy shares on GLBSE

[Garr255]

Buy shares on GLBSE

+1
Do that with 1k or more then buy hardware with the rest.

[kingkatari]

I would Buy Hardware most likely BFL singles to mine up more then enough coin to make another $5k

[bitlane]

I was/am in a similar position....and the hardware keeps a flowin' in

[Fizzgig]

I would buy coins, what can equipment return in a year? after 1 year the inflation rate cuts in half, then less as demand inevitably increases. Speculation ftw.

[mufa23]

Hardware by far! It would pay itself off after 5-7 months (that's including the electric bill), then I'd really start bringing in the dough. Would have made $10k in a year (5k the first, 10k every other).

If I had a few thousand lying around, I'd be putting everything I've got into it right now. Only have a few hundred... Still have 2GH/s though. Better then nothing. 2k a year isn't too bad for now.

[Fuzzy]

Hardware by far! It would pay itself off after 5-7 months (that's including the electric bill)

By my Calculations, even at a measly 5% difficulty increase per re-target, the hardware wouldn't have paid off even after a year.
And that's assuming you could get $5000 worth of Mini-rig Value hashing power delivered today.

From my calcs, you'd only have 821 BTC after a year, whereas you could buy 1000 BTC now and save yourself the electricity/heat/hassle of dealing with the hardware.

This calculation is assuming:

• $5000 worth of "MiniRig Value" hardware
• No Delivery Wait Time
• No Electricity cost
• Difficulty increase of 5% every 13 days
• Block split in 210 days
• 1000 BTC bought today at $5 ea

"Growth factor" should read "Daily reward multiplier"


EDIT: This is not an attack on people buying/making hardware or bitcoins. I'm looking for a logical discussion.
I am fully aware that a 5% difficulty increase cannot be/is impossible to guarantee/foresee, but it's the best estimate I can come up with.

[proudhon]

Hardware by far! It would pay itself off after 5-7 months (that's including the electric bill)

By my Calculations, even at a measly 5% difficulty increase per re-target, the hardware wouldn't have paid off even after a year.
And that's assuming you could get $5000 worth of Mini-rig Value hashing power delivered today.

From my calcs, you'd only have 821 BTC after a year, whereas you could buy 1000 BTC now and save yourself the electricity/heat/hassle of dealing with the hardware.

Will post excel img in a sec

Bingo.

[Garr255]

I agree with the posts above. Just buy all the coins being sold for <$5

[matthewh3]

Buy shares on GLBSE

+1
Do that with 1k or more then buy hardware with the rest.

+1

Do that and give the Hashking a large deposit as well.

Rational:  Spread it around

[mufa23]

I am roughly paying $2.5MH/s. I spent $800 for 2GH/s. Which brings in about 1.2BTC/day (Mining at EMC). At $5/Bitcoin, I will have paid itself off in around 160 days (5.3 months). With the remaining 205 days left in the year, I would make 246BTC at current difficulty. Multiple those coins by 5 (dollars), and you come up with $1,230 of pure profit.

So now knowing this, I would spend $5k for roughly 12.5GH/s (7.5BTC/day). Which would pay itself off after 160 days, bringing in a total profit of 1,537.5BTC ($7,687.5 USD). Now if at the end of the year I could sell off the hardware for half of what I bought it for, I would have turned 5k into 10k within the year.

Sounds worth it to me.

[Fuzzy]

I am roughly paying $2.5MH/s. I spent $800 for 2GH/s. Which brings in about 1.2BTC/day (Mining at EMC). At $5/Bitcoin, I will have paid itself off in around 160 days (5.3 months). With the remaining 205 days left in the year, I would make 246BTC at current difficulty. Multiple those coins by 5 (dollars), and you come up with $1,230 of pure profit.

So now knowing this, I would spend $5k for roughly 12.5GH/s (7.5BTC/day). Which would pay itself off after 160 days, bringing in a total profit of 1,537.5BTC ($7,687.5 USD). Now if at the end of the year I could sell off the hardware for half of what I bought it for, I would have turned 5k into 10k within the year.

Sounds worth it to me.

How do you do that? $0.4 per MHs sounds unrealistic.

[Littleshop]

I am roughly paying $2.5MH/s. I spent $800 for 2GH/s. Which brings in about 1.2BTC/day (Mining at EMC). At $5/Bitcoin, I will have paid itself off in around 160 days (5.3 months). With the remaining 205 days left in the year, I would make 246BTC at current difficulty. Multiple those coins by 5 (dollars), and you come up with $1,230 of pure profit.

So now knowing this, I would spend $5k for roughly 12.5GH/s (7.5BTC/day). Which would pay itself off after 160 days, bringing in a total profit of 1,537.5BTC ($7,687.5 USD). Now if at the end of the year I could sell off the hardware for half of what I bought it for, I would have turned 5k into 10k within the year.

Sounds worth it to me.

Works great when you ignore electricity cost and difficulty increases.   You might get free power but you don't get to ignore difficulty.

Also hardware never fails?

Right now, if you own GPU's and your power is below 12c a KWh leave gear on, or if you own FPGA's leave them on. 

If you do not own, buy coins or invest in the BTC economy in other ways.

 

[check_status]

By my Calculations, even at a measly 5% difficulty increase per re-target, the hardware wouldn't have paid off even after a year.
And that's assuming you could get $5000 worth of Mini-rig Value hashing power delivered today.

From my calcs, you'd only have 821 BTC after a year, whereas you could buy 1000 BTC now and save yourself the electricity/heat/hassle of dealing with the hardware.

This calculation is assuming:

$5000 worth of "MiniRig Value" hardware
No Delivery Wait Time
No Electricity cost
Difficulty increase of 5% every 13 days
Block split in 210 days
1000 BTC bought today at $5 ea

Your calculations are flawed because they utilize a fixed value of Bitcoin based on today while all of your other numbers vary into the future. If you want a more realistic profit profile then you need to project the growth in Bitcoin value to coinside with your other projected growth variables. Drawing a line from the beginning of Bitcoin value to todays Bitcoion value and then extend into your desired future cashout date, say 12 months, will give your spread sheet a more realistic perspective of Bitcoin mining profitability. Of course, this assumes the projected growth of Bitcoin value is constant.

How do you do that? $0.4 per MHs sounds unrealistic.

mufa23 is only quoting the cost of the GPU's because he may have utilized existing MB/PSU/CPU/RAM. So for mufa23 he only had to spend $800 to become a miner. His next 2 GH/s will cost $.60 per MH/s.