Post
Topic
Board Mining
Re: What ROI really means...
by
JoelKatz
on 15/11/2013, 01:14:00 UTC
Also the rapid (but not stable, will probably drop $100 or so) gains in the BTC/USD price makes breaking even a lot more possible.
No, it makes it harder, because it encourages more mining, causing difficulty to rise more rapidly than expected. If you're already mining, your mining hardware is a sunk cost. Be able to buy mining hardware for fewer Bitcoins doesn't help you. The rising BTC/USD price favors Bitcoin holders and disfavors Bitcoin miners. (In fact, it means you have to mine for longer, which actually increases your costs slightly because mining hardware has to be maintained, needs Internet access, and so in.)

If you don't want to take a long-term long position on Bitcoins or don't have money to invest, you should not mine. If you do want to take a long-term position on Bitcoins and do have money to invest, you face a question -- should I buy and hold or should I mine? The advantage of buying and holding is that you can time your selling. The only conceivable advantage of mining would be that you get more Bitcoins that way. If it doesn't do that, it has no conceivable advantage over buying and holding but does have disadvantages. If mining is inferior to buying and holding, why would any sane person do it?