Should I invest?

[VolK]

So, as I have read, the difficulty of mining is set to almost quadruple, due to the  scheduled doubling, and the introduction of cheap, very efficient and powerful machines from BFL. If I did my calculations correctly, buying two "Jalapeno" machines running at 3.5 Gh/s each, should net me a profit of ~2300$ a year, with the current difficulty quadrupled, and the price staying the same per bitcoin, around $6.40 a coin. Is this really worth it? I have the money to buy 2-3 machines, as I currently have a job. Should I buy more than two, or will two be plenty to turn a decent profit? Are bitcoin prices rising, falling?       

[1714779048]

1714779048

[Dargo]

It will likely more than quadruple initially, and it certainly won't stop there. The network will probably grow to 20-30x what it is now before there is any hope of a plateau. It's very strange that you are asking whether an investment of $300 that you think would net you $2300 a year is worth it - if that kind of return were possible, it would be a no-brainer. In reality the investment won't be nearly that good. At best, you might be able to pay off the two Jalapenos within 6 months and then maybe earn a profit of $150-$200 in the following 6 months. Not much profit, but you're not investing much either.   

[VolK]

It will likely more than quadruple initially, and it certainly won't stop there. The network will probably grow to 20-30x what it is now before there is any hope of a plateau. It's very strange that you are asking whether an investment of $300 that you think would net you $2300 a year is worth it - if that kind of return were possible, it would be a no-brainer. In reality the investment won't be nearly that good. At best, you might be able to pay off the two Jalapenos within 6 months and then maybe earn a profit of $150-$200 in the following 6 months. Not much profit, but you're not investing much either.   

Ouch. But that is assuming the price of bitcoins stay the same, yes?

[Dargo]

I'm not sure why you are saying "ouch." Mining is not a get rich quick scheme. Most would consider an investment where you pay off your hardware in 6 months amazingly good. Even if the price of bitcoin doubles in the next few months, the block reward will be dropping to half what it is now 50 --> 25, and the effective reward will be about what it is now. I'm assuming people will keep piling in with ASIC hardware at least until it's about the same investment-wise as FGPA/GPU is now. And about the best you can do with current hardware is pay it off in about 6 months. ASIC will very quickly become about the same, or even worse depending on how many pile in. I think it's still a decent investment b/c you could probably double your money in 1.5 years and still have the hardware - but it's not nearly as rosy as you were assuming in the OP.

[VolK]

I'm not sure why you are saying "ouch." Mining is not a get rich quick scheme. Most would consider an investment where you pay off your hardware in 6 months amazingly good. Even if the price of bitcoin doubles in the next few months, the block reward will be dropping to half what it is now 50 --> 25, and the effective reward will be about what it is now. I'm assuming people will keep piling in with ASIC hardware at least until it's about the same investment-wise as FGPA/GPU is now. And about the best you can do with current hardware is pay it off in about 6 months. ASIC will very quickly become about the same, or even worse depending on how many pile in. I think it's still a decent investment b/c you could probably double your money in 1.5 years and still have the hardware - but it's not nearly as rosy as you were assuming in the OP.

That's true, I just wasn't expecting an increase of 20-30x in difficulty, that's what the ouch was for. Still, now that I think about it , that still isn't too bad, making my investment back in 6 months
 

[Dargo]

Well, very roughly speaking, the ASIC network could grow to 20x what the pre-ASIC network is now (i.e. 250 Th), and ASIC mining would still be as good an investment as GPU/FPGA is now. Why? b/c ASIC is roughly 20x better in terms of hash/$ compared to current hardware. So the network can grow quite a bit and ASIC is still a decent investment. And I expect it will grow to at least this level about as quickly as BFL can crank out units. 

[VolK]

Well, very roughly speaking, the ASIC network could grow to 20x what the pre-ASIC network is now (i.e. 250 Th), and ASIC mining would still be as good an investment as GPU/FPGA is now. Why? b/c ASIC is roughly 20x better in terms of hash/$ compared to current hardware. So the network can grow quite a bit and ASIC is still a decent investment. And I expect it will grow to at least this level about as quickly as BFL can crank out units. 

So then investing in 2-3 units, or 4-6 and pool my resources with a close friend, would be a good idea? It seems that the returns would be worth it, especally if i jump on it while ASIC is still in the pre order stage.

[OgNasty]

There are lots of other Bitcoin investments you can make besides just mining as well.  Check out the GLBSE or some of the Lending options available.

[zhitgeist]

Well, very roughly speaking, the ASIC network could grow to 20x what the pre-ASIC network is now...

I've got a feeling it will even grow much larger than that.

[VolK]

Well, very roughly speaking, the ASIC network could grow to 20x what the pre-ASIC network is now...

I've got a feeling it will even grow much larger than that.

Who knows though? Although it is unlikely, ASCI miners could utterly fail, and the market could crash. It's all speculation.

There are lots of other Bitcoin investments you can make besides just mining...

Wouldn't buying bitcoins at the current price be the best option? If the price increases, then coins bought now would be worth more.

[Dargo]

Well, very roughly speaking, the ASIC network could grow to 20x what the pre-ASIC network is now...

I've got a feeling it will even grow much larger than that.

I'm sure it will eventually, but the more pertinent question is, how long will this take? If it take two years, then ASIC mining is a good investment now. If BFL's first shipment is 250 Th, then not so much.

[btcwalker]

The main problem of ASIC is that it is only usefull for mining. GPUs have wide range of applications.