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Poll
Question: Are you still buying mining equipment?
Yes - 37 (18.1%)
No - 79 (38.7%)
I have some hardware on the way, but after that, I'm done. - 37 (18.1%)
Can't.... stop.... mining.... - 14 (6.9%)
I may buy more in the future if the difficulty stops rising so quickly. - 37 (18.1%)
Total Voters: 204

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Author Topic: POLL: Are you still buying mining equipment?  (Read 4195 times)
JJG
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May 24, 2011, 02:05:58 PM
 #21

Too many assumptions, few facts. If you believe that buying btc directly is the best thing to do, pls sell me at $1.32, which is the actual cost for me to mine each one.   Grin


This happens in every single "should I buy mining hardware" thread:

The question starts as: Is it profitable to buy mining hardware now and pay it off over the next few months?
And the want-to-believe crowd jumps and and says: The hardware I started mining with months ago [i.e. when difficulty was much lower] is still profitable to operate.

These are two entirely different questions.


Difficulty is set to go up by 63%+ at the next jump. Bigger than the last jump, and bigger again than the jump before. Around each jump, the mining optimists come in and declare that difficulty is going to stabilize or even fall soon. And it doesn't.

And SgtSpike: Read my post more carefully. I said I don't believe that the exchange rate will continue to go up. I just pointed out that if you believe mining will be profitable in the long term then you must also believe exchange rates will continue to go up in the long term. If you believe that, then mining isn't your best option.

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darre
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May 24, 2011, 02:13:19 PM
 #22

Higher dificulty = Higher price of bitcoin.

Everything else would be complete madness..
gusti
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May 24, 2011, 02:16:51 PM
 #23

Too many assumptions, few facts. If you believe that buying btc directly is the best thing to do, pls sell me at $1.32, which is the actual cost for me to mine each one.   Grin


This happens in every single "should I buy mining hardware" thread:

The question starts as: Is it profitable to buy mining hardware now and pay it off over the next few months?
And the want-to-believe crowd jumps and and says: The hardware I started mining with months ago [i.e. when difficulty was much lower] is still profitable to operate.

These are two entirely different questions.


Difficulty is set to go up by 63%+ at the next jump. Bigger than the last jump, and bigger again than the jump before. Around each jump, the mining optimists come in and declare that difficulty is going to stabilize or even fall soon. And it doesn't.

And SgtSpike: Read my post more carefully. I said I don't believe that the exchange rate will continue to go up. I just pointed out that if you believe mining will be profitable in the long term then you must also believe exchange rates will continue to go up in the long term. If you believe that, then mining isn't your best option.




Being myself a professional miner, I read your mining-not-profitable campaign with great interest. With due respect, are you also a miner, and wish to discourage competition ? Competition is good. All your pessimistic predictions proved to be wrong until today. I envision that the bitcoin ecosystem will stabilize on a slightly profitable to very profitable to slightly profitable again cycles.




If you don't own the private keys, you don't own the coins.
BitcoinsWallet
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May 24, 2011, 02:31:10 PM
 #24

hopefully... I don't receive donations  Cry .... And mining at 35 Mh/s....  Cool
JJG
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May 24, 2011, 02:33:04 PM
 #25

Higher dificulty = Higher price of bitcoin.

Everything else would be complete madness..

That's quite the fallacy you've embraced.

The price of bitcoin is dependent only on supply and demand. More sellers == lower price. More buyers == higher price.
JJG
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May 24, 2011, 02:43:01 PM
 #26

Being myself a professional miner, I read your mining-not-profitable campaign with great interest. With due respect, are you also a miner, and wish to discourage competition ? Competition is good. All your pessimistic predictions proved to be wrong until today. I envision that the bitcoin ecosystem will stabilize on a slightly profitable to very profitable to slightly profitable again cycles.

While I'm not thrilled with your change of the subject without addressing my prior points, I'll play along:

My predictions were not wrong. Go back and re-read my posts where I iterate the same point: If you believe the exchange rate will continue to go up (critical for long-term mining profitability) then you're probably better off purchasing bitcoins directly than investing in mining hardware.

Several members were kind enough to provide mine/buy comparisons for their own situations, and surprised to find that they would have been much better off buying BTC directly. To the tune of 200% or more.

Quote from: gusti
All your pessimistic predictions proved to be wrong until today.

Hardly. If you believe that, then you don't understand my position.

And as much as people would like to relate my small mining activities to this: Don't bother. If you want to debate, argue with math and logic. I was in the right place (had good hardware) and the right time (low difficulty, high exchange rates) so I mined. It was logical.

The total network hashing power is around 3 Thash/sec. If I convince 100 people not to run out and buy $1500 mining machines, it's not going to affect the steep climb of difficulty in any appreciable way, and you can't argue otherwise. I will have, however, saved 100 people from getting caught up in a highly speculative investment trap when everyone else on the forum is gung-ho about buying mining hardware regardless of the math.



Remember, this forum self-selects for miners and those who believe. Those who stop by, run the numbers, determine that buying mining hardware is not a good investment, and leave will not be posting here. Visitors are likely to get a highly skewed view of bitcoin mining. And that drives me nuts.
SgtSpike
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May 24, 2011, 04:54:00 PM
 #27

Too many assumptions, few facts. If you believe that buying btc directly is the best thing to do, pls sell me at $1.32, which is the actual cost for me to mine each one.   Grin


This happens in every single "should I buy mining hardware" thread:

The question starts as: Is it profitable to buy mining hardware now and pay it off over the next few months?
And the want-to-believe crowd jumps and and says: The hardware I started mining with months ago [i.e. when difficulty was much lower] is still profitable to operate.

These are two entirely different questions.


Difficulty is set to go up by 63%+ at the next jump. Bigger than the last jump, and bigger again than the jump before. Around each jump, the mining optimists come in and declare that difficulty is going to stabilize or even fall soon. And it doesn't.

And SgtSpike: Read my post more carefully. I said I don't believe that the exchange rate will continue to go up. I just pointed out that if you believe mining will be profitable in the long term then you must also believe exchange rates will continue to go up in the long term. If you believe that, then mining isn't your best option.
I missed that.  In that case, I completely agree.  When I first started mining three weeks ago, it was more profitable to mine instead of invest directly in bitcoins, when looking at the longer-term picture and assuming no more huge jumps in BTC price.  This was because of the EXTREMELY low difficulty level compared to the current price.  Now, difficulty is still working on catching up, and it has already caught up to the point of investing being more profitable than mining, except at 0% or negative BTC valuation changes.  It will only take a few more difficulty increases like this upcoming one before investing at 0% valuation change is more profitable than buying mining equipment...
scifimike12
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May 24, 2011, 06:55:21 PM
 #28

Answer: No

I was fortunate to have a 5870 when I started mining.  I'm also really fortunate that it overclocks very well, currently at 1130/900 putting out 473 Mhash/s.
Chucksta
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May 24, 2011, 07:08:11 PM
 #29

Anyone buying equipment now is a mug... it looks like this 50%+ increase in difficulty is going to continue. It won't be long at all until it is no longer worth mining. I reckon from 1.5 to 2 months. Probably down to just over $1 per 2 gfx card rig per day, after just 1 month. That's with 1 BTC = $7

After that, the only people left out there mining will be those who do not have to pay for electricity, and the crazy people.
fergalish
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May 25, 2011, 08:32:06 AM
 #30

Higher dificulty = Higher price of bitcoin.
The price of bitcoin is dependent only on supply and demand. More sellers == lower price. More buyers == higher price.
It's not entirely mistaken.  darre should use a one-way equals sign, or an "implies sign".

Higher difficulty =/> higher price   (=/>  is "does not imply")
Higher price => higher difficulty   (=>  is "implies")

If the price goes up, it becomes more profitable to mine, so more people mine and the difficulty rises.  This does not change bitcoin supply because the (appx. constant) quantity of new bitcoins is much smaller than the quantity traded (new btc=7,200/day, traded at MtGox only > 30,000/day).

If the difficulty goes up, mining is less profitable BUT it is still economically rational for a miner who has already bought a rig to continue mining (up to a certain point which depends on each individual's opinion of future BTC value).

But if the difficulty spontaneously goes up, implying that more people are mining, there is still no change in supply.  I'm still trying to understand why more people should spontaneously start mining though.  Perhaps, as word spreads, people see what a fantastic idea or investment bitcoins are, and erroneously conclude that mining is uniquely the best strategy.  However, if that's the case, then there should be other newcomers who erroneously conclude that *buying* is uniquely the best strategy, and so the price should *also* rise.

Hah, so, maybe as difficulty rises, more newcomers will see the folly of mining and tend to favour buying, so the current exponential rise in difficulty should gradually transfer over to an exponential rise in price.
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May 25, 2011, 08:35:58 AM
 #31

I wonder how many of these new people buying mining hardware .....

i did not buy my new card for bitcoin only, old card was nvidia 8800gt, almost 3 years old Wink

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May 25, 2011, 08:39:58 AM
 #32

Higher difficulty =/> higher price   (=/>  is "does not imply")
Higher price => higher difficulty   (=>  is "implies")

I mostly agree but there is some linkage in the other direction.  Let's say someone wants to acquire 1 bitcoin for some reason.  If he can mine it for $5, he's less likely to want to buy it for say $7.  If it costs $10 to mine, he's going to be willing to pay $7 or even more.  

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