Crypto Mega-Thread [A.K.A Cryptocurrency mining isn't for hobbyists and Ethereum's terrible]

Science, Engineering, & Tech Cryptocurrencies
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183

OK.

I’m going to say that the value of your mining is based solely upon the price of the coin at the time it’s mined as the process of coming into ownership of the coin is identical to having just bought it with “real money”, so any additional value gained or lost after the mining process by trading or waiting for a month when it’s higher etc. is completely detached.

Given an initial cost of $2000 and a monthly cost of $130 thereafter, with an initial income of $310 which degrades each month by ~9.677% (from the optimistic side of your estimation on how much you’ll earn next month div this month’s (280/310)), and a current estimated resale value of your miner of $1500, decreasing by $50/month, we get this 12 month plot…

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The red line’s your costs (albeit probably a limited scope of them - only including the initial cost of your miner and your monthly electricity bill).
The blue line’s the money you’ve taken in + the estimated resale value of your miner at the time.
The green line’s your profit (so, blue line - red line).

If you really want I could expand that to a 24 month plot but the trend’s pretty obvious already so I don’t think there’s need.

What I miss? How do you make profit on this? The best I’m seeing is you getting out of this at around 6 months in with ~$116 in losses.

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184

Cool, thanks.

I mean… everything about that graph is a hypothetical situation that I don’t believe will happen.

  1. Assumes I only mine Ethereum for 1 year.
  2. Assumes Ethereum stays at $200 for that 1 year.

Neither of those things are likely to be true. But more importantly…

I’ve experienced 3 major surges in Bitcoin price. One being it jumping from $15ish to over $50, one being it jumping from $200 to $800. And the last being it jumping from $400 to $2000+. Twice I was mining and decided to stop because it didn’t look profitable. Both times that decision burned me heavily.

I’m not gonna make that mistake a third time. Here is Bitcoin’s lifetime chart:

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Red is when I mined. Blue is when I sold my coins. Green is when I believe I should’ve been mining. A LOT of that time would’ve been considered “not profitable” by your estimations, but if I sold when the spikes happened, All of it would’ve been very profitable.

I’m just… not gonna do that again. I had 1.7 BTC once. That was the sell in 2013. I made like 0.4 BTC with the same hardware in 2014.

The answer is always that the people who mine when it isn’t profitable are the ones that make the most profits. Do you think the people who got ahead of the Ethereum craze made the most money, starting mining a few months before everyone else did? Or do you think it was the people who started mining Ethereum back when it was worth less than a dollar?

We’re probably about to enter another long period of lower BTC prices. I could be wrong, but either way, I believe it will spike again. As long as I only sell when it spikes, it is profitable. When you sell is everything when it comes if it is profitable or not.

Calculating profitability, in the moment, is dumb, when you aren’t selling in the moment. That’s the most concise way I can say what I think of you asking me “how is your setup profitable?”

The only hardship my way brings is the one that all investments bring. My money is tied up in something I don’t have immediate access to and I don’t know when I might have access to it again. I mean, I could sell it if it were an emergency and get the money in a few days, but that’s not something I expect to happen (who does?)

TL;DR: “How do you make profit on this?” Be patient and sell when it (BTC) spikes.

185

true that
you can average earnings by the 24 hours
but if you hold onto it, then that all changes

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186

So you’re saying your small scale mining is only profitable when you use its outputs to speculatively trade then.

Looks like measuring it against trading without mining isn’t as invalid as you were saying it was…

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187

Bitcoin’s historical data is a terrible metric for measuring long term coin value trends.

99.9% of other coins show no correlation to BTC behaviors in that large an aggregate.

also, what @MFZuul said lmao

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Where did I say it was valid to measure it against trading without mining?

The one who keeps doing that is tkoham.

That’s why I trade everything over to BTC.

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He said you said it wasn’t valid, which you did.

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I must have been sleepy. My bad.

I did? Could you quote where I did?

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Excuse me for the inaccuracy: you strongly implied that it didn’t make sense and didn’t apply to you

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I find it ironic that you’re mining a crytocurrency but can’t understand basic maths.

Wrong because...

here is a 24 month plot for you:

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^your quote on this month’s with other coins inclusive.

Wrong because...

i.e. you estimated this month’s income to be $310, then the next to be $280. That’s a ~9.677% decrease in income. Extrapolate that to the following twelve months and your incomes would be, to 2dp…

[310.0, 280.0, 252.9, 228.43, 206.32, 186.36, 168.32, 152.03, 137.32, 124.03, 112.03, 101.19, 91.39]

it’s solely based upon your estimation of earnings.

Irrelevant because...

i.e. the only gain from mining is the coin at the value it’s at when it’s mined. If you’re not mining an amount of ethereum with greater worth than what you initially invested (which you’re not, according to what you’ve told us, by a long stretch - the only reason why the profit line’s anywhere near the x axis is because we’re considering your mining rig resale value to be part of your income if you sold at a given point), you might as well just be using the money you spent on your miner and the money you’re continuing to spend on electricity to just buy ethereum.

See:

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Red line is your expenses mining. Yellow line is your expenses for just buying the same amount of currency that you’re mining. If the mining was worth your bother, these lines would intersect and the cost of simply buying your currencies would be above that of maintaining your miner.

But it aint. Even if, with the purple line, we account for the money you’d get back from reselling your miner.

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193

It looks like @anon37239676 and @tkoham have thoroughly proven why it makes more sense to invest directly in the currency than to mine it. I guess if you want to feel justified in mining, you can just tell yourself that if everyone bought in directly instead of mining, it wouldn’t be worth anything, and if the market value permanently goes to shit, at least you still have something, hardware, to show for the money you invested.

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Mining at scale is still profitable, because your electricity costs can come way down in bulk, as can your equipment. in addition, you can gain access to people willing to provide you with proprietary miners and OCL kernels along with other optimizations that will give your equipment an efficiency edge.

You can further subsidize your costs by launching a pool, and get dumb hobbyists to add to your aggregate hashpower for a “small fee” as they’d have very little chance of a payout otherwise.

The way most difficulty adjustments works disproportionately affect miners the smaller their percentage of the network is by necessity of the math involved.

Big mining is still profitable, and small mining can also be opportunistically, but since the eth craze, it hasn’t been for small miners.

Unprofitable ventures don’t airlift more equipment in right after a price crater;

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195

Yes, that’s a more accurate way to put it.

Buying the coin instead of mining is profitable too. I’d just prefer mining to it for the reasons I’ve given.

Well if you want to be that way, then you don’ t understand basic communication skills.

I said:

Where the “only” goes matters. If I had said “Assumes I mine Ethereum for only one year.” then the year is in question, but it’s not because I intentionally put only before Ethereum because I don’t believe I’ll be mining Ethereum for a year, and definitely don’t believe I will be mining it for more than that.

But my estimation of my earnings was provoked by you wanting a specific number, so I used the only logical one which I thought you’d prefer, the earnings based on Ethereum’s current price. Which I think is not the right way to estimate these things, but you wanted a number.

It’s like you want to be technically correct while ignoring what the actual context is.

That’s my problem. Everything you use to define future profitability assumes the current situation’s numbers remain the same going forward. That my income will drop by the same percentage each month (it won’t), my hardware will devalue the same each month (it won’t), etc etc.

“But that’s what you gave me.” … And what else should I have given you?

I gave you what I figured you’d want, even though I think doing it that way is not useful for actually figuring out future profitability.

So basically: Mining Hardware + (electricity * months mining) has to be less than (coin price * coins mined per month) each month.

And I’m assuming you are using these to produce those graphs along with estimated reduction in income per month and hardware devaluation.

What I’m seeing is that it is awfully close. It isn’t presuming all variables remain the same, but they won’t.

Effort to change is not worth what is gained through change in this situation.

Uh huh.

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I pay up too 0.40c per kwh residential
I pay up too 0.26c per kwh buisness
Bay area ca.

197

Wow… that’s a lot.

198

Washington state residential
0.09c per kwh
1289
I pay about $20 a DAY in power here in ca

Im fuck8n moving to wa…
last bill was $770 pge

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199

ironically way more people drive teslas over there

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200

Reading through the last 100 or so posts, i’ve come to the conclusion that Lastworditus is a serious medical condition.

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201

yer fuckin rite m8

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I pay $0.08125 per kWh here in Texas.That’s averaged per hour after I pay $0.13 per kWh with 8PM to 5AM free.