Quote from: poby on June 10, 2017, 12:07:50 AM

Quote from: MrSamHammich on June 10, 2017, 12:00:06 AM

Thank you for explaining it to this newbie.

I'll use ETH as an example. I'm operating under the assumption that it's popularity (and hence market cap) is bound to rise faster than its difficulty. While mining rewards may dwindle as difficulty rises, the value of mined coins rises faster. Of course, we have no way to know for sure, but is my reasoning at least based on good logic?

Broadly speaking, you are right. Except your assumption may not hold true. If the price stagnates or even falls, your rig will quickly become worthless. Difficulty will likely continue to increase during a period of price stagnation. Even selling off the parts won't get you much back as ebay will be bloated with them. From a pure business risk/reward prospective, buying and holding the coins themselves is less risky and possibly more profitable in the long run.
But not as much fun as mining!

Don't be tempted to see it as more than a hobby.

Suprisingly during the 2014 mining crash. Most of the GPUs held their value pretty well. I think if you listed it for sale during the Summer of 2014 on eBay which was already flooded with GPUs you might of gotten a bad price, especially if you overpaid for it back in Feb/Mar 2014.

However the supply was quickly absorbed and during Christmas 2014 you could of sold it at a decent price. I think I sold my R9 270X for $100 USD in the last quarter of 2014 and I bought them originally for $200 USD the year prior. So only $100 loss per GPU.

Computer equipment holds value very well. The worst are Bitcoin ASICS where most paid $10000 for an ASIC at the beginning of 2014 that later on ended up selling for $200 at the end of the year.