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

[Fuzzy]

of course, i think 1 year is short sighted. afterall, the hardware isn't ALL going to melt down into piles of goo in exactly 12 months.

I've talked to a CA and am working on a even more flawed 2 year projection that accounts for capital gains, net losses, and hardware depreciation write offs.

This WILL require an estimate of BTC value in 2 years, but will be used as a user input, so you can guess at whatever value you think is best.

So many negative trolls, so few tangible solutions 

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[Seal]

Spend $2k on Mining Hardware (sounds like you wanna play anyway)
Spend $2k on coins
Spend $1k on Bitcoin investments (setting up a site... buying bitcoin related shares etc...)

Diversification. The lowest risk, and the highest potential upside. Mining will return you consistent income on your spending, but will by no means make you rich.

[Fuzzy]

Spend $2k on Mining Hardware (sounds like you wanna play anyway)
Spend $2k on coins
Spend $1k on Bitcoin investments (setting up a site... buying bitcoin related shares etc...)

Diversification. The lowest risk, and the highest potential upside. Mining will return you consistent income on your spending, but will by no means make you rich.

[Aseras]

If anyone can figure this out they should be playing the stock market.

$5000 can buy a lot of hardware depending on the goods and a deal.

I just saw 6 5830, 2 5850 and 4 5870 sell for ~$1000. ( http://hardforum.com/showthread.php?t=1695049 ) That's 5.8gh

Figure a couple good deals like that plus some other hardware costs and you have 15-20 gh for your 5 grand.

If you have cheap or free power you are golden and break even in 3-4 months.

[SgtSpike]

If anyone can figure this out they should be playing the stock market.

$5000 can buy a lot of hardware depending on the goods and a deal.

I just saw 6 5830, 2 5850 and 4 5870 sell for ~$1000. ( http://hardforum.com/showthread.php?t=1695049 ) That's 5.8gh

Figure a couple good deals like that plus some other hardware costs and you have 15-20 gh for your 5 grand.

If you have cheap or free power you are golden and break even in 3-4 months.

That's a big if though.  15-20 GH/s of GPU hashing power is gonna be 5,000 to 10,000 watts of power.  You have to be able to have wiring to support that much of a power draw, as well as cheap enough electricity to make it work.

Assuming worst case scenario, and it draws 10,000 watts while only getting 15 GH/s, and also assuming that you don't need HVAC, you'd have to have an electric rate less than $0.14/kwh in order to make ANY money whatsoever.

[Aseras]

Well if I had to pay, power here is 5 cents. $.05/kwhr here. It's cheap. Luckily I can run my farm where I have "free" power and climate control. Aside from maintenance and reinvestment, my mining is pure profit.

[Bitcoin Oz]

Mining will only be profitable if you dont have to pay eletricity or rent.

Find someone who has free/cheap electricity and rent on glbse and buy their shares is my tip.

[Aseras]

Or for someone who mined a ton of coins early and can afford to "waste" them on FPGA or asics or whatever without real cost to them. The buy in cost is killer. Long term is useless if you don't have a powerful setup and be able to stay on the bleeding edge long enough to break even.  even now that gap is widening between the hobbyists and the professionals to the point where unless you are perpetually investing returns you won't make it long. I've paid for my 5830s and 5850s many times over. I doubt many will see 3-4 times the cost of the next big thing. FPGA or mini rig or asic unless they are willing to invest at a loss long enough and hard enough to drive the little guys out and essentially carve a niche out.

[Phinnaeus Gage]

I have not read past post #2, therefore this may be already addressed. I would say either if you have faith in Bitcoin. As for buying hardware, I say the hell with the electricity cost, for that would be overcome down the road provided you hold unto your bitcoins, paying the electric company with fiat.

Via buying coins, I would hold onto them until the price you paid for your coins doubles, then spend half your coins, keeping the other half. Then if by chance Bitcoin goes to zero, you are even, but cashing out at any point prior to even is your profit. If the price doubles again, do the same thing, at which point you have made another 100% profit and still have 1/4 of your coins in your wallet(s).

Hope that helps.

~Bruno~

[notme]

This Trend Graph is based on the market prices for each month, projected out until march 2013.

Horrible X-axis labeling.  What month does it start at?

[Garr255]

This Trend Graph is based on the market prices for each month, projected out until march 2013.

Horrible X-axis labeling.  What month does it start at?

You can't subtract from

march 2013

?

[Astro]

$5000 of Facebook stock, all in.

[Shadow383]

$5000 of Facebook stock, all in.

You sure you don't want to pick up some Greek government bonds whilst you're at it? 

[smoothie]

Coins.

Simply because with mining it is a race to who gets their order first and also who pays the least for electricity.

I say coins will be a better bet than trying to mine. Just like in early 2011 if you bought a ton and didnt mine you would still have had 2.5x more coins than if you tried mining 24/7 for the next 6 months.

Bitcoins are waaaaaaaay undervalued. Once mining hardware hits the scene difficulty and price will skyrocket.

[notme]

$5000 of Facebook stock, all in.

Lol.

When they IPO'd at $38, I told several friends and family it would hit $20 before the year is up.  Now, at around $23, I'm thinking the low will be around $16 for this year.  I doubt it will reverse direction much next year either.  Maybe sideways if you're lucky.  Look at the P/E ratio and ask yourself can you wait that many years to get your money back.  Sure, revenues could rise, but why would they?  Every step they take seems to drive away users since they are slowly realizing they are the product, not the customer.

[Shadow383]

$5000 of Facebook stock, all in.

Lol.

When they IPO'd at $38, I told several friends and family it would hit $20 before the year is up.  Now, at around $23, I'm thinking the low will be around $16 for this year.  I doubt it will reverse direction much next year either.  Maybe sideways if you're lucky.  Look at the P/E ratio and ask yourself can you wait that many years to get your money back.  Sure, revenues could rise, but why would they?  Every step they take seems to drive away users since they are slowly realizing they are the product, not the customer.

Did you short it? I did, made a month's pay in one trade 

[notme]

$5000 of Facebook stock, all in.

Lol.

When they IPO'd at $38, I told several friends and family it would hit $20 before the year is up.  Now, at around $23, I'm thinking the low will be around $16 for this year.  I doubt it will reverse direction much next year either.  Maybe sideways if you're lucky.  Look at the P/E ratio and ask yourself can you wait that many years to get your money back.  Sure, revenues could rise, but why would they?  Every step they take seems to drive away users since they are slowly realizing they are the product, not the customer.

Did you short it? I did, made a month's pay in one trade 

Nope... all my trading money was already allocated.  Mostly in bitcoin .  Stocks are iffy for me anyway since there is too easy for them to get away from reality with today's financial system.

[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.

Price of bitcoin during time of quote (May 12): $5.10
Price of bitcoin now (Aug 4): $11.10
Invest $5000 into bitcoin during time of original post: 980 bitcoins
Value of investment after 11 weeks: $10,878, increase of 118% IN 80 DAYS!

How long can this insane increase continue? Who still doubts bitcoins are going to be worth hundreds some day?

Anyway...Sell half and invest $5400 into equipment. Problem solved.