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I don't understand the economic argument for personal mining (I totally get it from a fun, geeky PoV if making money isn't the primary goal - it's how I got sta

I don't understand the economic argument for personal mining (I totally get it from a fun, geeky PoV if making money isn't the primary goal - it's how I got started in crypto). A GTX1070 costs about $800. At $4/day, it will take you 200 days to make back your principle (ignoring power costs, difficulty scores going up etc. - in reality it will obviously take you even longer to cover your costs). If you had put that same $800 in to buying ETH (picked because it's a relatively safe, "boring" coin) on 1st July, 200 days later (or 7 months) it would have been worth $2,140 (yielding a $1,340 profit per card equivalent cost invested - note I'm using ETH price on 1st Jan 2018 and not including the recent growth to a new all time high). And the profit will likely x5 (or more) this year if you hold on to your ETH.

thescriptkiddie 9y ago
Buying and holding an asset requires that you accept the risk that the value could fall. Miners can profit while minimizing their risk exposure by selling whatever they mine immediately.
- corford 9y ago
  >by selling whatever they mine immediately. In this market that just seems like the equivalent of burning your money in the street.
fla 9y ago
Its simple: The risk taken is completely different! Mining is a much lower risk that yields less benefits.
- corford 9y ago
  I'm not sure I agree. Depending on what you're mining and when you start, you may never make your costs back. If anything, at this point (especially with more and more new coins adopting PoS rather than PoW) I'd say it's more risky than just buying a stable coin (ETH, BTC, LTC etc) and sitting on it for a year (and that's before factoring in the risk of lost potential earnings had you simply bought rather than mined or that your mining pool gets hacked).
  - metamet 9y ago
    Most people mine ETH, though. So your options there are to either buy ETH on the market, or invest in a miner that will pay itself off in 3 months with ETH, then just provide pure profit for as long as it's, well, profitable.
  - protomok 9y ago
    I would argue mining is much lower risk but has much lower potential for reward. After paying off the card (<=4 months of mining) all earnings from mining can be converted to USD for example on a monthly basis. The odds of even 1/10th of major coins switching to PoS in the near future is very low. I completely agree that just owning coins has way more upside and I suspect you'll do very well! But I prefer the asymetrical mining returns - I have lots of upside and almost zero downside versus extreme upside and extreme downside (crash in coin prices, hacks, regulation, etc.) from owning coins. But to each their own!
SkyPuncher 9y ago
Don't forget that graphics card can still have value outside of pure mining. A couple years ago I dabbled in mining. I got a top end card that would mine transactions for 16+ hours a day. When I actually wanted to use my computer, I'd flip mining off for a couple of hours and do whatever I needed. I got to game with ultra graphics, have a PC for school work, and do some mining.
- corford 9y ago
  That's fine and makes sense to me. It's more the people that cram 8 cards in to their machine and mine 24/7 that I have a hard time understanding.
  - alexktz 9y ago
    £6 per card per day (1080ti) is quite appealing. 60p electricity costs. £48 per day minus £4.80 costs. Every day? For just leaving something switched on? It is quite appealing. I got my 1080ti's for £650 a pop. ROI is 108 days. That's why people, myself included, are doing it.
    - corford 9y ago
      I still don't get it :( That's 108 days before you _start_ to make a profit and future returns are guaranteed to diminish as difficulty goes up. Versus £5,200 capital to invest immediately in a basket of safe (as much as crypto currencies can be), liquid coins that will likely x3 to x8 over a 12 month period. To each their own I guess but it's not the bet for me.
      - ConnorLeet 9y ago
        If the whole crypto ecosystem crashes (unlikely in my opinion) graphics cards can be resold and recoup losses.
        corford 9y ago
        Not sure this holds either. With such a black swan event, there would be a glut of second hand graphics cards on ebay etc. Seems safer to me (if you're worried about a huge crash) to leave your principle investment equivalent amount on a good exchange with fiat support (e.g. Bitstamp) setup a sensible stop loss order and then, as soon as you've x2 your original investment, pull your initial stake out and leave the rest in crypto (on a Nano Ledger S or similar).
AlwaysBCoding 9y ago
If you're buying stuff on darknet markets it's nice to be able to do it with freshly mined coins that don't have transaction histories associated with them.
- corford 9y ago
  Haha, hadn't thought of that :) This reason makes sense to me.
- Casseres 9y ago
  Or use Monero which doesn't have transaction histories associated with it.
- wk2jkhkjdfglsl 9y ago
  This would only apply to solo-mined block rewards. If you use a mining pool, there is a coin trail through the pool. The pool likely has the IP address records of your miners and can link these to your payout transaction. Mined coin is only just a little less traceable than exchange purchased coin.
- viraptor 9y ago
  Why does it matter? Once you do the transfer, why would anyone refuse to send you the goods? It's not like they can reverse the transaction - only send back the equivalent amount in the best case.
deadw0mb 9y ago
> A GTX1070 costs about $800. Where on earth are you getting that statistic? Newegg sells GTX 1070 ti's for ~500 when they are in stock. Same with bhphotovideo. Depending on what coin you mine you can net $8-10 dollars a day - then exchange it to ETH/LTC/XMR/etc. Also factoring in the growth rate of the exchanged currency the ROI on that is less than 3 months.
- corford 9y ago
  >Where on earth are you getting that statistic? I just stuck "GTX1070" in Amazon and that's the rough price that came up.
  - deleted 9y ago
    [deleted]
  - deadw0mb 9y ago
    GPUs are on backorder almost everywhere. So suppliers that still have them are all at 2-3x the price. When they are in stock they are ~$500.

thescriptkiddie 9y ago

Buying and holding an asset requires that you accept the risk that the value could fall. Miners can profit while minimizing their risk exposure by selling whatever they mine immediately.

corford 9y ago
>by selling whatever they mine immediately. In this market that just seems like the equivalent of burning your money in the street.

fla 9y ago

Its simple: The risk taken is completely different! Mining is a much lower risk that yields less benefits.

corford 9y ago
I'm not sure I agree. Depending on what you're mining and when you start, you may never make your costs back. If anything, at this point (especially with more and more new coins adopting PoS rather than PoW) I'd say it's more risky than just buying a stable coin (ETH, BTC, LTC etc) and sitting on it for a year (and that's before factoring in the risk of lost potential earnings had you simply bought rather than mined or that your mining pool gets hacked).
- metamet 9y ago
  Most people mine ETH, though. So your options there are to either buy ETH on the market, or invest in a miner that will pay itself off in 3 months with ETH, then just provide pure profit for as long as it's, well, profitable.
- protomok 9y ago
  I would argue mining is much lower risk but has much lower potential for reward. After paying off the card (<=4 months of mining) all earnings from mining can be converted to USD for example on a monthly basis. The odds of even 1/10th of major coins switching to PoS in the near future is very low. I completely agree that just owning coins has way more upside and I suspect you'll do very well! But I prefer the asymetrical mining returns - I have lots of upside and almost zero downside versus extreme upside and extreme downside (crash in coin prices, hacks, regulation, etc.) from owning coins. But to each their own!

SkyPuncher 9y ago

Don't forget that graphics card can still have value outside of pure mining. A couple years ago I dabbled in mining. I got a top end card that would mine transactions for 16+ hours a day. When I actually wanted to use my computer, I'd flip mining off for a couple of hours and do whatever I needed. I got to game with ultra graphics, have a PC for school work, and do some mining.

corford 9y ago
That's fine and makes sense to me. It's more the people that cram 8 cards in to their machine and mine 24/7 that I have a hard time understanding.
- alexktz 9y ago
  £6 per card per day (1080ti) is quite appealing. 60p electricity costs. £48 per day minus £4.80 costs. Every day? For just leaving something switched on? It is quite appealing. I got my 1080ti's for £650 a pop. ROI is 108 days. That's why people, myself included, are doing it.
  - corford 9y ago
    I still don't get it :( That's 108 days before you _start_ to make a profit and future returns are guaranteed to diminish as difficulty goes up. Versus £5,200 capital to invest immediately in a basket of safe (as much as crypto currencies can be), liquid coins that will likely x3 to x8 over a 12 month period. To each their own I guess but it's not the bet for me.
    - ConnorLeet 9y ago
      If the whole crypto ecosystem crashes (unlikely in my opinion) graphics cards can be resold and recoup losses.
      - corford 9y ago
        Not sure this holds either. With such a black swan event, there would be a glut of second hand graphics cards on ebay etc. Seems safer to me (if you're worried about a huge crash) to leave your principle investment equivalent amount on a good exchange with fiat support (e.g. Bitstamp) setup a sensible stop loss order and then, as soon as you've x2 your original investment, pull your initial stake out and leave the rest in crypto (on a Nano Ledger S or similar).

AlwaysBCoding 9y ago

If you're buying stuff on darknet markets it's nice to be able to do it with freshly mined coins that don't have transaction histories associated with them.

corford 9y ago
Haha, hadn't thought of that :) This reason makes sense to me.
Casseres 9y ago
Or use Monero which doesn't have transaction histories associated with it.
wk2jkhkjdfglsl 9y ago
This would only apply to solo-mined block rewards. If you use a mining pool, there is a coin trail through the pool. The pool likely has the IP address records of your miners and can link these to your payout transaction. Mined coin is only just a little less traceable than exchange purchased coin.
viraptor 9y ago
Why does it matter? Once you do the transfer, why would anyone refuse to send you the goods? It's not like they can reverse the transaction - only send back the equivalent amount in the best case.

deadw0mb 9y ago

> A GTX1070 costs about $800. Where on earth are you getting that statistic? Newegg sells GTX 1070 ti's for ~500 when they are in stock. Same with bhphotovideo. Depending on what coin you mine you can net $8-10 dollars a day - then exchange it to ETH/LTC/XMR/etc. Also factoring in the growth rate of the exchanged currency the ROI on that is less than 3 months.

corford 9y ago
>Where on earth are you getting that statistic? I just stuck "GTX1070" in Amazon and that's the rough price that came up.
- deleted 9y ago
  [deleted]
- deadw0mb 9y ago
  GPUs are on backorder almost everywhere. So suppliers that still have them are all at 2-3x the price. When they are in stock they are ~$500.