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Can I Make a Living Off Bitcoin Mining? Probably Not

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Re: Can I Make a Living Off Bitcoin Mining? Probably Not

#11

Post by brazzy »

wintersFright wrote: post #10
M4v3R wrote: post #8

Mining was profitable to average users (i.e. not sitting on huge piles of cash) in 2011 and early 2012 probably (source: I owned two 5970s and some 5870s at mined quite a few coins with them). Right now you have to invest much money in ASICs (GPU mining isn't worth anything at this moment) which may also be never delivered or delivered so late that you're out of game by then. Most people agree that if you believe in…

Is it deflationary because of the 21 million limit? That limit won't hit until 2140. Or is it deflationary because the projected velocity will go up faster than the mining output?

It's deflationary now if the rate of new bitcoins being mined is smaller than the rate of demand increase.

Re: Can I Make a Living Off Bitcoin Mining? Probably Not

#12

Post by PeterisP »

nwh wrote: post #6
nodata wrote: post #5

What does doing it "full time" mean? Is he sitting there watching the machines?

Not casually. I've a little ASIC device sitting in the corner, but it's more a mild curiosity than any actual income. I've made a lot more money reselling the devices than I have mining with then.

Bitcoin mining is not a "job" (requiring effort) but an investment - requiring capital. So in the long run, it shouldn't be possible to get a return on bitcoin mining much above normal market interest rates, since if the return would be higher (as it was just recently) then an investor can buy/build large amounts of ASICs and drive bitcoin price down.

Re: Can I Make a Living Off Bitcoin Mining? Probably Not

#14

Post by nwh »

PeterisP wrote: post #12
nwh wrote: post #6

Earlier quoted context omitted.

Not casually. I've a little ASIC device sitting in the corner, but it's more a mild curiosity than any actual income. I've made a lot more money reselling the devices than I have mining with then.

Bitcoin mining is not a "job" (requiring effort) but an investment - requiring capital. So in the long run, it shouldn't be possible to get a return on bitcoin mining much above normal market interest rates, since if the return would be higher (as it was just recently) then an investor can buy/build large amounts of ASICs and drive bitcoin price down.

There's certainly people who have lucked out and made a considerable amount of money that would, for all intents, be a replacement job for them. Some of the early Avalon machines would have been making hundreds of dollars a day when they were received. Even earlier miners on CPUs would be rolling in hundreds of thousands of dollars.

Re: Can I Make a Living Off Bitcoin Mining? Probably Not

#15

Post by thenomad »

Important note: this is not current information. Bitcoin and Litecoin mining have both changed a lot in the last few months, and this post is from April.

I spent some time looking into mining about three weeks ago - with the proviso that my hardware would be free, since I run a 3D animation company that's in the process of transitioning to GPU-based rendering - and came to the conclusion that right now, it still ain't worth it.

Re: Can I Make a Living Off Bitcoin Mining? Probably Not

#16

Post by Tichy »

raverbashing wrote: post #7

Which is funny, even after all the math and concluding that, no, you can't turn a big profit, people still do it. I mean, ok, you benefit the bitcoin community with it, still... Not to mention the maintenance costs (assembling the rigs, wiring, parts that stop working, etc)

I did it for fun two years ago and made a plus.

Since the future price of Bitcoin is unknown, at the end of the day you can not really decide if mining is profitable with maths.

I stopped mining when I generated less money than I spent for electricity (the gear had already been paid off). However, back then the exchange rate was maybe 5$. If I had known that it would be 100$ two years later, perhaps I could have mined longer.

Re: Can I Make a Living Off Bitcoin Mining? Probably Not

#18

Post by thenomad »

mavhc wrote: post #9

Obviously the amount a bitcoin is worth is exactly the amount of money the average person spent to generate it, so you can't profit from it.

... if you're the average person. Usually, in a situation like this, it isn't too hard to out-execute the average person at some point.

Re: Can I Make a Living Off Bitcoin Mining? Probably Not

#19

Post by skriticos2 »

wintersFright wrote: post #10
M4v3R wrote: post #8

Mining was profitable to average users (i.e. not sitting on huge piles of cash) in 2011 and early 2012 probably (source: I owned two 5970s and some 5870s at mined quite a few coins with them). Right now you have to invest much money in ASICs (GPU mining isn't worth anything at this moment) which may also be never delivered or delivered so late that you're out of game by then. Most people agree that if you believe in…

Is it deflationary because of the 21 million limit? That limit won't hit until 2140. Or is it deflationary because the projected velocity will go up faster than the mining output?

Please don't mix supply with perceived value.

It's deflationary in the sense that with passing time each coin is worth more than before. There is some correlation with money supply, but deflation ultimately means: how much can you buy for a set amount of currency.

The inflation/deflation of the US dollar for instance is measured by statistics like the CPI, which boils down to how much consumer goods you can buy. If you can buy 10 peaces of bread this year for $10 but only 9 peaces of bred next year, you have inflation. If you can buy 11, you have deflation. How the dollar supply (number of existing dollars) changes has a correlation to this (i.e. it influences this), but it's not defining it.

http://en.wikipedia.org/wiki/Consumer_price_index

Re: Can I Make a Living Off Bitcoin Mining? Probably Not

#20

Post by caf »

thenomad wrote: post #18
mavhc wrote: post #9

Obviously the amount a bitcoin is worth is exactly the amount of money the average person spent to generate it, so you can't profit from it.

... if you're the average person. Usually, in a situation like this, it isn't too hard to out-execute the average person at some point.

The easiest way in this case looks to be somewhere with cheaper electricity than the average person.
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