Quote from: kevinnem on July 23, 2013, 07:12:23 PM

I think part of the discussion missing here, is the assumptions of current, historical, and future exchange rate of bitcoin and usd(or what ever fiat)

you see if price goes up to 1 btc = 300usd, that is a different situation then if 1 btc goes down to 50 .....

I would think in the long term the suck-fixed cost of aquireing bit coin will pale in compareision to the exchange rate change, . be it up or down.

The future exchange rate is irrelevent from the standpoint of "should I buy new hardware" because you always have the choice of simply buying Bitcoins instead.

Some made up numbers to illustrate the point.

Say you could buy a "x brand" ASIC today it would cost 100 BTC. However due to rising difficulty it will only produce 90 BTC over the next two years before it is obsolete. Now lets also say the current exchange rate is $100 and two years from now it is $500. You likely are thinking "but wait I paid 100 * $100 = $10,000 and will get 90 * 500 = $45,000 so I come out head". While true in dollar terms you don't know the exchange rate *will* rise to $500, it could instead drop to $50. Your gain isn't from mining but merely speculation. To speculate on future exchange rates one could generate a larger gain with lower risk by simply buying and holding BTC instead of buying hardware. Buying 100 BTC will be worth 100 BTC in two years. This is better than paying 100 BTC for hardware that will produce 90 BTC into two years.