Is rig building still profitable?

[epi 1:10,000]

Where a work the hardware that runs above 65 C burns out faster than the stuff that runs below 55 C at a cost of hundreds of thousands of dollars.  Then again all the lasers and electron guns don't help much.  I have already wrecked my old HD4850 running constantly @ 73 C so I assumed that the same trend I see at work would apply to mining.

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[bullox]

I don't think building a new computer a week from now just for mining will be profitable. I think the value of bitcoins are going down in the near future anyways. If you want to build a gaming computer or upgrade your current nvidia 9600 and mine when you aren't gaming you might not get back your money but you will recoupe some of your investment.  Remember mining will burn out your hardware faster than normal use.

No it won't.

Yes, it will.  Consistent full load will create more heat than normal usage.  Heat is a major factor for hardware failure.  Anything above 55-60C for long periods of time is probably contributing to what manufacturers would call "abnormal wear".

I dont think the OP was positing that mining will burn your shit out tomorrow, but unless you are water-cooled or are otherwise extremely thermally balanced, make no mistake, you are subtracting life from your hardware.

[swerving]

If building a rig isn't profitable, would just upgrading a video card still be worth it?

[allinvain]

I don't think building a new computer a week from now just for mining will be profitable. I think the value of bitcoins are going down in the near future anyways. If you want to build a gaming computer or upgrade your current nvidia 9600 and mine when you aren't gaming you might not get back your money but you will recoupe some of your investment.  Remember mining will burn out your hardware faster than normal use.

No it won't.

Yes, it will.  Consistent full load will create more heat than normal usage.  Heat is a major factor for hardware failure.  Anything above 55-60C for long periods of time is probably contributing to what manufacturers would call "abnormal wear".

I dont think the OP was positing that mining will burn your shit out tomorrow, but unless you are water-cooled or are otherwise extremely thermally balanced, make no mistake, you are subtracting life from your hardware.

Anything above 60? pff..no way..radeon cards for example are ok with temperatures way above that.

[SgtSpike]

Where a work the hardware that runs above 65 C burns out faster than the stuff that runs below 55 C at a cost of hundreds of thousands of dollars.  Then again all the lasers and electron guns don't help much.  I have already wrecked my old HD4850 running constantly @ 73 C so I assumed that the same trend I see at work would apply to mining.

But see, other people have had cards die shortly after purchasing them out of the blue as well.  Or die during what would be considered "normal use".  Just because yours died doesn't mean that heat was the cause.

[JJG]

Anything above 60? pff..no way..radeon cards for example are ok with temperatures way above that.

The higher the temperature, the shorter the lifespan. It's not a matter of drawing a line at a certain temperature.

Remember, we're not talking about the card just dying 10 minutes after you start your miner. It's a question of reduced card lifespan and MTBF.

Voltage is a big killer too, for anyone who might be considering serious overclocking.

[knightmb]

Tough call really. When mining clouds were rare back in my time last year, the cost was not worth it because the value was 1 BTC -> $0.001 almost.  But now, even though they cost much more to produce than the value, the long term investment makes it worth the cost now.

I wouldn't look at a mega-rig as a short term lotto, but more like a long-term investment. If it cost $1k to only mine $500 worth of BTC, it doesn't make sense in the short term, but if a year from now that same BTC that you spent $1k to create was now worth $2k in value, then you have a good long term investment.

So if you want to play the day-trading like the stock market, buy/sell BTC with the market wave. If you are looking for a more long-term investment, a mega-rig might be the answer if you are willing to take that long term risk. The rig could die early or it could hum all year and produce a nice vacation fund for the family.

It's all about risk.

[JJG]

I wouldn't look at a mega-rig as a short term lotto, but more like a long-term investment. If it cost $1k to only mine $500 worth of BTC, it doesn't make sense in the short term, but if a year from now that same BTC that you spent $1k to create was now worth $2k in value, then you have a good long term investment.

This doesn't make sense.

Your example requires the exchange rate of bitcoin to quadruple (BTC value from $500 to $2000).

If you're so sure that will happen, why would you spend $1K on hardware to acquire $500 worth of bitcoins, when you could instead spend $500 and get $500 in bitcoins, doubling your return?

[Gameover]

The BTC value is going to go down, way down.  Its quite simple, before 2 days ago I had never heard of bitcoin, I have a 6950 sitting idle that is now generating bitcoins, there are millions of people exactly like me who have never heard of bitcoin, there is 0 out of pocket expense for them to start generating bitcoins at a much more efficient rate than you can, and they dont have to buy anything.  As they come online the production of bitcoin will explode and the price will fall dramatically, how much, quite simple, down to the rate at which they are barely profitable from an energy standpoint, for me since it costs me $0.24 to generate a bitcoin, I would guess the value of bitcoins to be $0.25 - $1 in the long term.  Of course as the value drops more people will stop producing bitcoins since its not worth the time or hassle leaving the price somewhere above the raw energy costs.

[allinvain]

Anything above 60? pff..no way..radeon cards for example are ok with temperatures way above that.

The higher the temperature, the shorter the lifespan. It's not a matter of drawing a line at a certain temperature.

Remember, we're not talking about the card just dying 10 minutes after you start your miner. It's a question of reduced card lifespan and MTBF.

Voltage is a big killer too, for anyone who might be considering serious overclocking.

That's why I don't overvolt or overclock my cards. I intend to squeeze as many bitcoins out of them as possible for as long as possible.

Although the logic of "higher the temp the shorter the lifespan" is valid I don't think there is a way to measure or to know when and if the card(s) will fail. I think it's more likely that the fans will die before the actual GPU die will somehow fail. What's worse for a card is cold and hot cycles..running it at a constant temp I think is far better..no thermal expansion and contraction cycles which can mess with the soldering.

[Orbit45244]

It looks like the summary of this topic so far is that rig building is only profitable if you already have the hardware or you get your hardware at a discount, and if you expect the value of the bitcoin to appreciate.

Correct?

[k]

The BTC value is going to go down, way down.  Its quite simple, before 2 days ago I had never heard of bitcoin, I have a 6950 sitting idle that is now generating bitcoins, there are millions of people exactly like me who have never heard of bitcoin, there is 0 out of pocket expense for them to start generating bitcoins at a much more efficient rate than you can, and they dont have to buy anything.  As they come online the production of bitcoin will explode and the price will fall dramatically, how much, quite simple, down to the rate at which they are barely profitable from an energy standpoint, for me since it costs me $0.24 to generate a bitcoin, I would guess the value of bitcoins to be $0.25 - $1 in the long term.  Of course as the value drops more people will stop producing bitcoins since its not worth the time or hassle leaving the price somewhere above the raw energy costs.

Gamover the supply of bitcoins is not going to dramatically increase as you suggest. read about how the difficulty changes every 2016 blocks. if all these people with idle gpus start mining the rate at which blocks are found will increase but then the difficulty will adjust so that on average 1block/10 minutes will be found (or ~2016 every 2 weeks). the algorithm is constructed to maintain a steady supply over time so the production of bitcoins won't explode like you suggest

[Gameover]

Gamover the supply of bitcoins is not going to dramatically increase as you suggest. read about how the difficulty changes every 2016 blocks. if all these people with idle gpus start mining the rate at which blocks are found will increase but then the difficulty will adjust so that on average 1block/10 minutes will be found (or ~2016 every 2 weeks). the algorithm is constructed to maintain a steady supply over time so the production of bitcoins won't explode like you suggest

I agree, the supply can't increase, but the value is going down, as more people mine in the background because they already have the hardware the price will go to the cost of power required to make the coin, since difficulty is going to increase as you pointed out, the price will increase over time, but from the base cost of $0.25, not from where it is today.  Anything over the base cost, plus some profit, plus the freedom of anonymous payments, puts the bitcoins real value at somewhere around $0.25 to $0.50, the $5 - $8 figure we are seeing is because of pure speculation, it has nothing to do with 'demand' of bitcoins since anything you can buy with them can be bought with normal dollars.

[allinvain]

Eventually demand will catch up and prices will skyrocket again. Remember that there will only be 21 million BTC out there EVER.

My gut feeling tells me that the cat is already out of the bag and that price will not go below $1 again.

[Syke]

for me since it costs me $0.24 to generate a bitcoin, I would guess the value of bitcoins to be $0.25 - $1 in the long term.

Is the value of a penny based on the cost to produce the penny? No.

Is the value of gold based on the cost to mine the gold? No.

So why do you assume the value of bitcoins will be equal to the cost to produce them? The value of bitcoins are based mainly on supply and demand.

[Gameover]

for me since it costs me $0.24 to generate a bitcoin, I would guess the value of bitcoins to be $0.25 - $1 in the long term.

Is the value of a penny based on the cost to produce the penny? No.
Is the value of gold based on the cost to mine the gold? No.
So why do you assume the value of bitcoins will be equal to the cost to produce them? The value of bitcoins are based mainly on supply and demand.

A penny is part of the reserve currency of the world, gold is a physical limited resource that has manufacturing value, bitcoins are neither of these, it is a made up virtual notion and exists only in theory.  Other than speculation why does anyone 'demand' a bitcoin?

[Jaime Frontero]

for me since it costs me $0.24 to generate a bitcoin, I would guess the value of bitcoins to be $0.25 - $1 in the long term.

Is the value of a penny based on the cost to produce the penny? No.
Is the value of gold based on the cost to mine the gold? No.
So why do you assume the value of bitcoins will be equal to the cost to produce them? The value of bitcoins are based mainly on supply and demand.

A penny is part of the reserve currency of the world, gold is a physical limited resource that has manufacturing value, bitcoins are neither of these, it is a made up virtual notion and exists only in theory.  Other than speculation why does anyone 'demand' a bitcoin?

Anonymity.

Transfer of value without fees to central (i.e., banking) authority.

Unstoppable transfer across borders.

[Gameover]

Anonymity.
Transfer of value without fees to central (i.e., banking) authority.
Unstoppable transfer across borders.

All excellent qualities but do you think they are worth 95% of the value of the bitcoin?

[Jaime Frontero]

Anonymity.
Transfer of value without fees to central (i.e., banking) authority.
Unstoppable transfer across borders.

All excellent qualities but do you think they are worth 95% of the value of the bitcoin?

they are if you require them.

[grndzero]

Anything over the base cost, plus some profit, plus the freedom of anonymous payments, puts the bitcoins real value at somewhere around $0.25 to $0.50

Do you have any hard technical data you'd like to share to support this assertion or is it all from your rectal knowledge base?

the $5 - $8 figure we are seeing is because of pure speculation, it has nothing to do with 'demand' of bitcoins since anything you can buy with them can be bought with normal dollars.

Since there are no futures contracts and the prices on the exchange are what people are actually trading BTC for cash, speculation doesn't have anything to do with it. It may or may not be overvalued but the market will determine that.