Quote from: DeathAndTaxes on April 20, 2012, 07:09:30 PM

Quote from: TragicWish on April 20, 2012, 12:41:45 PM

The thought has crossed my mind. I want to think the best in people, but it looks like the gap based on the initial cost of new hardware that can compete in the current system will likely start to grow even faster over the next few years. Likely the number of miners will decrease leaving more room for the people who have the money to continue to upgrade. Not that its a bad thing. Im concerned though that the economy wont be able to sustain itself with less miners unless more vendors start using it. Which I know has been said a million times already. One would have to speculate that most people who buy BitCoins are speculating and most people who mine them are doing so to sell to the speculators. So the value of a BitCoin has a long way to go towards earning real legitimacy.

That is flawed logic. "Upgrades" are new capital. If it makes sense for existing miners to deploy new capital then it makes sense for new miners to do so also.

I think most of the caution comes from the fact that noobs tend to make horribly stupid rigs (gaming CPU, fast HDD, expensive cases, etc) and have lots of naive assumptions. At one point when margins were much higher, pretty much any two GPUs in a box could be profitable so mistakes were less painful. Today it is all about MH/$, MH/W and your electrical cost. The days of slamming together some random junk and breaking even in 3 months are gone and will never ever come back.

If you got a 6-12 month time horizon and cheap electricity (<$0.10 per kWh) new GPU rigs can still be viable but you likely need to be willing to build a large number of them be comfortable buying used GPU, and know what parts you are buying and why. Margins are very tight.

If you got a longer time horizon, access to significant capital, and willing to lose almost everything if Bitcoin fails then FPGA are another option.

If your goal is to casually throw some random parts together and make 20% profit per month well you shouldn't be mining.

Mining will never be a get rich quick system. It is a commodity based "business" with almost no barriers to entry and global access. Margins will be a small % over the lowest cost producers.

First let me say, Thanks for responding. I was hoping at least one hero member would jump in on this so I could hear from someone who is actuly doing this on a simi large scale.

Quote from: DeathAndTaxes on April 20, 2012, 07:09:30 PM

That is flawed logic. "Upgrades" are new capital. If it makes sense for existing miners to deploy new capital then it makes sense for new miners to do so also.

That makes since to me with one exception. If someone were involved in mining when the profits were high then I can see them reinvesting their capital into new mining gear even though profits may not be as high as they were, simply because they have already reached a breakeven point. Also, since the community of miners is somewhat small its hard for me, being new to the idea, to know if they are anticipating profits or just havent given up on a lost cause.

Quote from: DeathAndTaxes on April 20, 2012, 07:09:30 PM

I think most of the caution comes from the fact that noobs tend to make horribly stupid rigs (gaming CPU, fast HDD, expensive cases, etc) and have lots of naive assumptions. At one point when margins were much higher, pretty much any two GPUs in a box could be profitable so mistakes were less painful. Today it is all about MH/$, MH/W and your electrical cost. The days of slamming together some random junk and breaking even in 3 months are gone and will never ever come back.

Im disappointed that I missed this window because I would have loved to build some rigs specifically for this. Right now I have a gaming setup with a 5770 in it and I starting mining with it just to see what it was all about. Now Im thinking about buying a BFL single and seeing where that takes me. I have <.10$ electricity so I doubt Ill completely lose my investment. I may even buy two just for the hell of it. That should put me at 1.6 GH/s if I understand correctly which might make me be able to pull down a few coins. I really want to coins for the sake of trading on the exchange anyway. Im also planning to buy some directly for that sake. Id be lying if I said I didnt dream of huge profits and getting rich quick. But ultimately Im not dumb enough to get my hopes up. Im more interested in this as a hobby. I love all the start ups, contracts, and trading you can do. It is a micro economy and I think it could be fun for experimentation sake.

Quote from: DeathAndTaxes on April 20, 2012, 07:09:30 PM

Mining will never be a get rich quick system. It is a commodity based "business" with almost no barriers to entry and global access. Margins will be a small % over the lowest cost producers.

I still have to argue that with FPGAs coming to market there will soon be little incentive that I can see for a person to mine with a GPU. I dont think they are dead yet, but wont be around much longer. Given that, I doubt most people who first learn about BitCoin will be willing to make the required investment to purchase a FPGA device. That means the mining power will probably be consolidated into smaller and smaller groups of people who were able/willing to invest at the right time. That might be a good thing for the price of BTC since more people who are interested in BTC will need to buy it on the market in order to get involved. Another possible scenario is that the more people going to FPGAs will drive their price down which will make them more viable for entry level miners, but I dont see the consumer base being large enough to support that.
If anything Ive said is completely off base feel free to let me know. I lack the experience with BTC to support my ideas fully. But Ill be watching to see how things turn out.