Quote from: cayars on March 29, 2014, 04:13:25 PM

Say to mine 1 BTC it costs a total of $510 and lets also say current value of BTC is $500. So to mine 1 BTC is COSTS you $10. So you are mining at a loss of $10 per BTC.

Now you could invest that $10 in saving into buying BTC or you could mine at a loss of $10 per BTC to sell them at a higher price later.

So I was saying it would cost $510 to mine 1 BTC that right now is worth $500. But say in 1 month it could be $650. So $140 profit.

It's all speculation of FUTURE value of a coin. But it CAN MAKE A LOT OF SENSE TO MINE AT A "PRESENT" LOSS!

Okay, so it costs you $510 to mine 1 BTC. Why is the alternative to only invest $10 in buying BTC? The alternative is to invest $510 in buying BTC, as that is what you have saved if you turn your equipment off.

Mining scenario - invest $510 to receive 1 BTC, value increases to $650, $140 profit
Invest via exchange scenario - invest $510 to receive 1.02 BTC, value increases to $663, $153 profit

When you mine you are converting fiat into coins via the cost of electricity, it never makes sense to pay more in electricity than you could get the same coins for from an exchange.

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