Bitcoin Forum
December 09, 2016, 02:06:29 AM *
News: To be able to use the next phase of the beta forum software, please ensure that your email address is correct/functional.
 
   Home   Help Search Donate Login Register  

Warning: Moderators do not remove likely scams. You must use your own brain: caveat emptor. Watch out for Ponzi schemes. Do not invest more than you can afford to lose.

Pages: [1]
  Print  
Author Topic: Buying mining assets is like shorting BTC/USD  (Read 847 times)
totaleclipseofthebank
Sr. Member
****
Offline Offline

Activity: 259


Bitcoin: Sell high or buy, trying


View Profile
June 20, 2012, 07:28:57 PM
 #1

Mining hardware is bought with fiat. Therefore the value of a MH/s is denominated in fiat. If the value of BTC goes up vs. fiat, the value of mining assets on GLBSE will decrease, because the divs will be expected to decrease at a faster rate, as a result of increasing difficulty (which follows BTC/fiat trend).

Mining is profitable (in terms of fiat) if the value of BTC goes up.
Mining assets are profitable (in terms of fiat) if the value of BTC stays the same or decreases.

Mining is unprofitable in terms of BTC if the value of BTC goes up. This is why it does not make sense to buy mining assets if you think the BTC/fiat is going up.

Thoughts on this logic?
1481249189
Hero Member
*
Offline Offline

Posts: 1481249189

View Profile Personal Message (Offline)

Ignore
1481249189
Reply with quote  #2

1481249189
Report to moderator
1481249189
Hero Member
*
Offline Offline

Posts: 1481249189

View Profile Personal Message (Offline)

Ignore
1481249189
Reply with quote  #2

1481249189
Report to moderator
According to NIST and ECRYPT II, the cryptographic algorithms used in Bitcoin are expected to be strong until at least 2030. (After that, it will not be too difficult to transition to different algorithms.)
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1481249189
Hero Member
*
Offline Offline

Posts: 1481249189

View Profile Personal Message (Offline)

Ignore
1481249189
Reply with quote  #2

1481249189
Report to moderator
1481249189
Hero Member
*
Offline Offline

Posts: 1481249189

View Profile Personal Message (Offline)

Ignore
1481249189
Reply with quote  #2

1481249189
Report to moderator
TehZomB
Sr. Member
****
Offline Offline

Activity: 294


WTB NHL Expansion team in Baltimore


View Profile WWW
June 20, 2012, 07:39:51 PM
 #2

sub
I want to see counter arguments.

pyramining
Hero Member
*****
Offline Offline

Activity: 501


View Profile
June 20, 2012, 08:06:44 PM
 #3

I agree and this is one of the reasons that prevented me to make a mining company (bonds) on GLBSE. With Pyramining you don't buy assets, you rent them, so you don't lose any value.

Until the account is active, you will get dividends + part of the deposit. Once the deposit is paid back (~10 months or less), hardware previously bought with it is kept at work for other/new members. Because of this, increasing difficulty or bounty halving should not be an issue.

The availability of new technologies does not affect the value of the deposit/investment because it gets paid back anyway in its whole. Should ASICs (or a cheaper technology, compared to the one in use) come out, new hashing power would be bought with that technology and every member benefits from this.

Nothing prevents any member to deposit again if they want a longer term investment.

The referral system allows everyone who invests a bit of their time to earn more than the standard 5-10%.

The only drawback is that an account can't be closed earlier than planned, because the deposit is entirely used to buy infrastructure. Third parties however are already offering to buy for a small fee the outstanding position, offering insurances and so on (google for it).

This method is a win win for both the mining company and their investors, and as far as I can tell I don't see any drawback in case of bitcoin value changes, mining difficulty variation, technologies, and so on.

If you manage to find some referrals it becomes an high-income investment. If you don't, you get 10% (5% if you don't have any sponsor, but it would make little sense ;-) ), which is smaller than piratewhatever operations, but it's plain safe and you know what your bitcoins are used for.

To avoid repeating everything, take a look at the official thread for more details: [https://bitcointalk.org/index.php?topic=80845.0].

I would appreciate any comment/thought, expecially in case it could help improoving the service.
Lumpy
Full Member
***
Offline Offline

Activity: 237


View Profile
June 20, 2012, 08:11:04 PM
 #4

Agree.
Pages: [1]
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!