When is mining better than just investing in bitcoin?

C

cryptonaut

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Thanks.
I’d like to see someone do a 3 year ROI projection for both strategies, mining vs. investing (Bitesize video topic?)
On that topic do any of the calculators include a comparison to your returns just buying bitcoin and hodling? Even better if they let you adjust the projected future bitcoin prices so you can play around with risk/reward.
 
Due to algorithmic difficulty adjustments won’t your return after initial ROI breakeven diminsh significantly after each new hardware generation (unless we bump up against the limitations to Moore’s law)?
 
Yes! The more difficult, the lower the hashrate. There is also the price factor. Should ethereum go up to $400 or $500 it will offset some of the difficulty, and if it drops it won’t generate much, but at least it’s paid off, and generating pure profit. The other good thing is that with GPU mining there’s always another coin you can mine, and there are calculators which tell you how much you can expect. Currently i run 19 rx480s which cost me $200 a piece, and generate $1400 a month at the current difficulty and price. I could switch to Monero which is currently more profitable by a bit, but i’ll stay the course with ETH for now.
 
Yes as @bencoinix stated and as @peter stated it almost always better to just invest. Most of the miners that I converse with enjoy it as a hobby like me that brings in some cash and pays for itself.
I am more heavily invested than mining invested.
Here are reasons that I mine.
  1. Hobby I love building and trouble shooting computers
  2. Enables me to support the projects I like such as ZenCash and Zcash. I like XMR also but my cards are better suited for the equihash algo (Nvidia)
  3. Allows me to DCA into more BTC with out much thinking about it.
  4. Keeps me involved in the space other than just doing my bi-weekly Friday purchase. Also the education and participation.
Those things add up in my book to being just as profitable as investing. Knowledge is everything and to be honest you do not learn much by just hitting the buy button. :) SMASH IT!!! But that is just me. I originally build my first mining rig just to earn enough BTC to buy/build a new bad arse computer every year. My personal PC to me is like supercars are to @peter
 
When you get the mining rig for free and hook it up to solar. That’s about it. Otherwise just smash into real coins.
 
Peter I have Antminer S9’s and L3+'s. Does the ‘its better to just Invest
in bitcoin’ rule apply to these devices?

 
@katzky and @peter Please explain because if a single mining rig is profitable then at scale is profitable. I do not see how 1 rig vs 30 rig has any different of a profitability.
If investing 2k in BTC is more profitable than mining then why wouldn’t the 60k that you would spend on 30 rigs be more profitable than mining. This doesn’t make sense in this arena. The at scale arguments works in production as you can lower costs significantly. From a cash flow perspective yes scale works better but from a profitability stand point I do not see this working the same.

 
This assumes the avg growth of btc over a longer period of time.
The rise in price is the long term gain here.
 
I get that
  1. Invest in BTC or buy a mining rig - the above statement states to buy BTC
  2. Invest in BTC or Mine at scale - Above statement says to Mine.
The answer shouldn’t change. I am asking for an explanation as to why the answer changes. You assume the avg growth of BTC over a long period of time in both scenarios that part doesn’t change.
 
Yes but the scale makes the payoff much better.
What is missing is the opportunity cost of either scenario. There is more opportunity for risk in single mining as the price could dip significantly.
Scale, with a longer timeline removes (some?) risk in a positive scenario.
I think everyone should mine. Btw. It’s good for learning more about the entire system.

 
I can see that as the payout will be much higher with the added risks. I have just heard this arguement multiple times in different forums but no one explained their point.
Example numbers here.
1rig = 1coin/month coin goes up 30%
30rig = 30coin/month same coin still has the same 30% gains. Of course the straight dollar made is going to be much larger but actual profit per rig would be the same. Thus making them equal in terms of profitability.
I agree if you are looking for cash flow you definitely want to go at a much larger scale. I looked at one point of how many GPU rigs I would to replace my current salary. Lets just say it is more than my residential feed could handle. lol.
 
Well. Let’s take into consideration as many variables as we can:
Single Mining:
  • 3 month lead time. Pay in Bitcoin to get it.
  • In 3 months for an asic you could have made your money short run in that lead time
  • Then you get your asic. You have a 4 month pay-back period. So that’s like 6-7 months where you could have invested that $ and made more in the short term!
Scale Mining ($50K+ into rigs)
  • No lead time. Can build a rig in a day like we did
  • Immediate returns
  • Same payback period in some cases, sometimes shorter depending on what you’re mining
  • Yes. Cost is more to get into it, however the long term play is way more gains/time
  • Also, (big plus for me), you’re supporting the network!
 
This is comparing ASIC to GPU mining not scale. Is this your definition of scale?
My comparison was keeping the mining device the same and just looking at scale as in the number of devices not the difference between the two as that is a completely different animal.
 
Why have you factored in a 3 month lead time? I can usually get Bitmain
Asic miners within 3 to 4 weeks of ordering from my suppliers. S9s are
currently paying 0.075 BTC per month each (not including electricity cost).
In that case is investing still better?
 
Doesn’t change much for me as I’m already at scale and very much enjoying the slow gains/time.
I didn’t know the lead time was 3/4 weeks… but that’s still shitty compared to building a rig in a day after spending a couple hours buying all the gear at your local microcenter…
 
if you can get ASICs earlth in their lifecycle and at cost, there is not better investment
for most, doing either is VERY difficult let alone both
 
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