Quote from: zefyr0s on February 05, 2014, 07:20:09 AM

Blood in blood out, right mainline?

The thing is, if the price increases, mining solutions that would not make ROI actually have the chance to do so. Meaning buying gear with a less than 100% ROI is just a gamble, one supposing that the price will increase.

Price increasing can cause a machine to ROI that otherwise wouldn't have - IF you consider the purchase price in USD - but if it only ROIs due to increase in bitcoin price, you should have just bought bitcoins.

One rational explanation for why people buy hardware that won't ROI is it is a "premium" they are paying for "truly anonymous coins" - If you buy a $1600 miner, produce 1.5 bitcoins with it, and bitcoins are worth $800 each, you technically didn't ROI, but you might consider those 1.5 BTC you didn't have to sign up for coinbase or go meet someone on localbitcoins to obtain to be worth $1600 total (i.e. 33% markup).

Obviously, that said, it is still a very risky strategy since the projected return of a miner can vary so heavily between the time it is ordered and the time it is received, you could still end up paying an unreasonable markup.

As for bitcoin difficulty, there is NO clear correlation between price and difficulty or hash rate. Value has gone up, hash rate has gone up, but so has my blood pressure and the number of seconds since 1980. That doesn't mean they have anything to do with each other. The price goes up when demand goes up faster than supply, but demand is fickle as a motherfucker and supply has a constant component from new coins, but is supplemented by people cashing out or buying things from vendors that convert to USD, which is a very complex system.