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Author Topic: Bit coin mining rig 10k budget  (Read 1425 times)
Motheaten
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June 23, 2012, 07:11:30 PM
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I have 10,000 USD to spend on a mining rig. I am only interested in investing in a rig if it can produce a profit reletivly quickly withing 12-18 months. If it is possible to produce a rig that is as efficient or more efficient for my budget please let me know. Thanks alot!  Smiley
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June 23, 2012, 07:20:51 PM
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Wait for this:http://news.yahoo.com/butterfly-labs-announces-next-generation-asic-lineup-054626776.html

Bitrated user: srcg.
Motheaten
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June 23, 2012, 07:30:51 PM
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Thanks for responding so quickly, but when is this company supposed to start producing this hardware?
CA Coins
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June 23, 2012, 07:34:17 PM
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Thanks for responding so quickly, but when is this company supposed to start producing this hardware?

Supposedly in October 2012, but nobody knows.  Mining is a tough proposition right now with all the uncertainty surrounding ASICs.  You can try some FPGAs out, but I would keep most of your dry powder in reserve to see what happens in the next few months.
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June 23, 2012, 08:42:06 PM
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Thanks for responding so quickly, but when is this company supposed to start producing this hardware?
No one know
Motheaten
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June 23, 2012, 08:45:09 PM
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From the numbers i've been reading for the last two days, the mining of bit coins will always remain unprofitable; because, apparently the purpose of bit coins is not to produce profit. I mean i understand that your not going to make 1000 dollars a day instantly mining bit coins, but if this community is going to expand and become more stable their needs to be something done about it. Because the technology obsoletes your mining equpment so fast it isnt even worth buying.
Gabi
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June 23, 2012, 08:46:48 PM
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Then don't buy.

Mining income is based on bitcoin price and on how many bitcoins are created in each block. That's all.

If people can gain from mining they will jump on it and difficulty will rise until no more people jump on it
Motheaten
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June 23, 2012, 09:31:55 PM
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Then don't buy.

Mining income is based on bitcoin price and on how many bitcoins are created in each block. That's all.

If people can gain from mining they will jump on it and difficulty will rise until no more people jump on it

But then what is the incentive for me to spend money mining bitcoins? I'm not trying to be difficult or an "ass"  I just want to understand the whole process.
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June 23, 2012, 10:23:50 PM
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Why would you mine? For profit. When there is profit? If the expenses for mining are less than the profit of the mined block reward

And what  determine the expenses? Easy, how many miners there are. Until there is profit miners number increase (->Difficulty) and then of course it stop (unless someone want to mine at a loss  Cheesy)

So of course eventually mining is not a "get rich quick scheme" but if you manage to outsmart other miners (getting cheaper electricity, better hardware like fpga or asic), there is still profit
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June 23, 2012, 11:21:02 PM
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Then don't buy.

Mining income is based on bitcoin price and on how many bitcoins are created in each block. That's all.

If people can gain from mining they will jump on it and difficulty will rise until no more people jump on it

But then what is the incentive for me to spend money mining bitcoins? I'm not trying to be difficult or an "ass"  I just want to understand the whole process.


@ Moth.

Right now there is a soon to come tech transition period.  Those that have invested in old technology with an inability to move forward with ASIC purchase will most definitely lose.

On the bright side, ASIC represents the most purpose specific technology for performing the calculation that ultimately earns a subsidy from the Bitcoin protocol.   So, yes, don't spend your money on any older technology.  Wait for the ASIC if you are going to get involved in mining.

Addressing profitability directly.  The Bitcoin protocol allows for a currency injection period until a max of 21 million bitcoins are generated.  The Bitcoin mining process is responsible for this currency injection (among other things).  To incentivize the activity of mining, which carries a capital and operational cost for the miner, the currency injection is rewarded to the miners.  This is where the profit lies.  How much profit you can make is entirely dependent on how much mining hash power you can bring to the table vs. the total hashing capacity of all miners.  If there are too many miners hashing revenue aka the currency injection will be more distributed requiring any one single miner to invest more capital in hashing power to gain more revenue.  There is a point where reward revenue per your hashing capacity is not sufficient to surpass capital and operating expenses.

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