Quote from: Hook^ on June 19, 2011, 03:08:08 AM

Quote from: KedP on June 19, 2011, 03:00:13 AM

Quote from: Hook^ on June 19, 2011, 02:38:54 AM

Quote from: AngelusWebDesign on June 19, 2011, 02:35:15 AM

Again, I'm not going to lower myself to calling names.

Where have I lied? No one has showed me a single "lie" that I have posted.

I'm just telling them to use their heads and be rational. That is all.

Nobody needs to "encourage" any newbie -- greed (which is part of human nature) does that role just fine. My "job" is to balance things, to help people think more clearly.

I am having the same problem in my mining thread. One guy follows my threads around to tell me how I am a troll and liar, but won't refute the facts I have put out.

The fact remains that because the network is doubling every 18 days, your output halves every 18 days and you won't ever break even because of that. The mining calculators don't take that into consideration.

Stating facts isn't the bullshit part.

The bullshit part is when you tell people "you won't ever break even" when YOU DON'T KNOW THAT.

Did you tell those people that by your same calculations, mining would be considered unproftaible in may? In april? In march?

Because all these calculations are the exact same calculations done for the last year, and these calculations say very little, because the people who do these calculations (you!) cannot predct the single important factor that actually matters: price.

All ROI calculations are bogus because all ROI calculations make assumptions about price. Any conclusion other than "I don't know what's going to happen, your guess is as good as mine. Just depends where you think the price will go." is bullshit.

Sorry, I misspoke. I should have said that mining isn't profitable at the current price, and is less profitable than investing in bitcoins directly with increasing prices. The only thing I am predicting is that the network continues to grow at 4%/day, which it has on average over the last year. Almost perfectly.

Check out http://bitcoin.sipa.be/ to see just how perfectly. As long as that remains the same, you won't make as much money as just investing in bitcoins.

So yes, I would have said in April that mining is less profitable too. If you had bought $1,000 in bitcoins you would have $20,000 in bitcoins now. Did anyone buying $1000 worth of mining equipment make $20,000 in that same time period?

I think it's cool that you're trying to learn how to be an amateur investment advisor.

So here's a lesson: risk is the single most important variable in an investment.

Buying bitcoins is, by a fundamental law of the universe, always going to be more potentially profitable than mining because it is higher risk.

Mining is lower risk, but also lower expected returns.

An investor's choice of where they should put their money and time depends on their risk profile.

Is the investor looking for a high risk, high yield investment, and is comfortable taking losses but still acting rationally? He should buy bitcoins.

Is the investor running tighter on money and can't afford to lose much, but also isn't aiming to make more? Is the investor willing to invest personal time and effort managing his investment? If yes he should consider mining.

Variables that matter for deciding about an investment in bitcoins:
- Your risk profile
- Your beliefs about future price
- Your skills (Are you capable of trading wisely? Avoiding panic? Not getting scammed?)*
- Your interests (Does system administration turn you on?)**

Things that don't matter:
- Other people's calculations about difficulty increases
- Bogus ROI calculations based on unknowable assumptions
- Stuff your competition says to discourage you from competing with them

*Lots of people who attempt to become traders end up losing their shirts because they panic. The ideal trader is a person who is rational and level-headed even when others scream that the sky is falling. Not every personality type is a good trader: people with the letter "F" in their MBTI are often naturally bad traders for instance and tend to buy high and sell low despite their best intentions. If you have an "F" in your MBTI you should consider if you can handle the pressure of knowing you could lose all your money.

**Running a bitcoin machine is like buying a pet. It takes regular maintenance and a non-zero recurring time investment. It also requires a variety of computer skills that many miners take for granted, but which newbies may not have and may not have an interest in learning.