Quote from: DeathAndTaxes on December 31, 2011, 04:08:23 PM

Quote from: Epoch on December 31, 2011, 08:18:12 AM

32GHash/s is the equivalent of 80 5870 GPUs. Assuming $200 apiece (used), that's an investment of $16000. With $80/day profit, it would take 7 months to pay that down. 7 months is a long time in the young bitcoin universe; prices, difficulty, will be quite volatile in that time period. Anyone willing to invest this much for this long in such a volatile environment is taking a big risk. A leap of faith, nothing more. Yes, you can end up ahead. You can also end up in a deep hole.

7 month payback is a stupid metric. A better one is assuming 3 year depreciation of hardware it is an annual return of 113%.

Let me know when you have an alternative high risk investment w/ 113% yield.

See the $16K (to use your numbers) is never ALL at risk. Lets assume in the short term the equipment can be sold for 50% ($8K) the reality is likely much more but lets be conservative. Still even the $8K is only at risk on day 1. $80 in daily revenue means the amount "at risk" falls by $500 or so a week. Unless revenue were to fall by 80% in first few weeks very little capital is put at risk.

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Come December 2012 when the mining reward gets cut in half, so will profits.

Simplistic nonsense. Difficulty will fall as the marginal miners get squeezed out. Nominal returns are worthless metric. What matters is revenue/difficulty or revenue per unit of hashing power. The only way revenue gets cut in half is if hashing power and price remain constant. Which would mean marginal miners continue to mine at a loss into perpetuity.

D&T, I agree with your points. My goal was to throw an alternate perspective out there to counterbalance jjiimm's overly positive tone. There are always at least 2 sides to any argument, and jjiimm was leaning a bit too heavily on one side (no offense intended, jjiimm); I may not be the best proponent of either, though. I merely like to see things are kept in balance.

As for myself, I mine as well (though nowhere near your 10GHash/s or jjiimm's 32GHash/s) and plan to continue. So if you were to ask me whether I think mining is a fool's errand, I would be a hypocrite to say yes.

I think we both understand the situation: what matters is the bottom line (net profit). And net profit depends directly on difficulty, BTC price, hashrate, and expenses (mainly electricity and equipment depreciation). As long as people understand the whole picture, they can make up their own minds about whether mining makes sense for them personally. Neither choice is wrong.