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Comment by corford | Hacker News Reader

I don't understand the economic argument for personal mining (I totally get it from a fun, geeky PoV if making money isn't the primary goal - it's how I got started in crypto).

A GTX1070 costs about $800. At $4/day, it will take you 200 days to make back your principle (ignoring power costs, difficulty scores going up etc. - in reality it will obviously take you even longer to cover your costs).

If you had put that same $800 in to buying ETH (picked because it's a relatively safe, "boring" coin) on 1st July, 200 days later (or 7 months) it would have been worth $2,140 (yielding a $1,340 profit per card equivalent cost invested - note I'm using ETH price on 1st Jan 2018 and not including the recent growth to a new all time high). And the profit will likely x5 (or more) this year if you hold on to your ETH.

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Don't forget that graphics card can still have value outside of pure mining.

A couple years ago I dabbled in mining. I got a top end card that would mine transactions for 16+ hours a day. When I actually wanted to use my computer, I'd flip mining off for a couple of hours and do whatever I needed.

I got to game with ultra graphics, have a PC for school work, and do some mining.

That's fine and makes sense to me. It's more the people that cram 8 cards in to their machine and mine 24/7 that I have a hard time understanding.

£6 per card per day (1080ti) is quite appealing. 60p electricity costs.

£48 per day minus £4.80 costs. Every day? For just leaving something switched on? It is quite appealing.

I got my 1080ti's for £650 a pop. ROI is 108 days. That's why people, myself included, are doing it.

I still don't get it :( That's 108 days before you _start_ to make a profit and future returns are guaranteed to diminish as difficulty goes up.

Versus £5,200 capital to invest immediately in a basket of safe (as much as crypto currencies can be), liquid coins that will likely x3 to x8 over a 12 month period.

To each their own I guess but it's not the bet for me.

If the whole crypto ecosystem crashes (unlikely in my opinion) graphics cards can be resold and recoup losses.

Not sure this holds either. With such a black swan event, there would be a glut of second hand graphics cards on ebay etc.

Seems safer to me (if you're worried about a huge crash) to leave your principle investment equivalent amount on a good exchange with fiat support (e.g. Bitstamp) setup a sensible stop loss order and then, as soon as you've x2 your original investment, pull your initial stake out and leave the rest in crypto (on a Nano Ledger S or similar).

I think people are going to be increasingly wary of second hand graphics cards. How many of them will have been trashed by running in a poorly-cooled mining rig for months on end?

What could cause such an event? Would coinbase going insolvent cause everything to crash beyond repair?

What if satoshi appeared and dumped his entire stake? That is probably the worst case scenario I can think of.

Bug in crypto where every private key is revealed? Not likely, just saying.

In the "invest in ETH" example, you're taking the appreciation of ETH into account, but in the case of mining crypto, you're ignoring it. Still, you're right in the overall point that just investing is more profitable. If you are going to gain value from the GPU, though, mining is a great way to make some extra cash.

Sorry, I just assumed ETH was out of reach of personal mining now.

Sure, you could hold "shitcoins" that are currently easier to mine but that's a lot more risky than long term holding something like ETH, LTC, XMR (at least I think it is anyway).

It takes 3 months to make all of your initial investment back on mining ETH with a 1060, after electricity.

That's actually better than I would have imagined. What's the difficulty growth like with ETH these days? Or, what's a safe estimation of how many ETH a 1060 could mine before Casper lands?

3 months is longer than 108 days ;)

I don't mine ETH directly with Nvidia hardware though it is still profitable on AMD gear. I use whattomine.com to get a rough estimate of my daily earnings...

I mine to a pool called miningpoolhub which auto exchanges my shitcoins to LTC (or whatever I choose). From there I send to Coinbase -> GDAX -> Sell for ETH or FIAT. So far, since starting mining 1 month ago I have ROI'd 1.8 1080ti's already. Once they've paid themselves off the rest is pure profit and the best part, GPUs have intrinsic value beyond mining.

Also as per other commentors - coins I mined will appreciate too. If I buy ETH with FIAT (which I have also done btw) I am literally buying thin air. At least with GPUs I own a thing if the shit hits the proverbial!

- whattomine.com - https://goo.gl/94KHv4

- https://simplemining.net/

- https://miningpoolhub.com

> 3 months is longer than 108 days ;)

Following the Gregorian calendar (international defacto standard) this statement is always false, never true.

There's no way all these coins are going to be accepted currencies (literally none are, not even Bitcoin). There's no way all these coins will retain long-term value either.

Anyone who joins in on the mining is doing two things: 1) joining in on the pyramid schemes (on which you as miner and cryptocurrency owner depend) 2) adding to more electricity waste.

As for GPUs. Once the shit hits the fan their price will freefall. If their price falls now, they're pretty much worthless. More so because many of them will be abused. GPUs aren't made to be used 24/7. But yeah, you can play games on all your 1080s...

Pretty much any coin that you mine could be exchanged into the coin that you would prefer to hold for the appreciation.

So: * Mine whatever is most profitable to mine at that time. * On mining that coin, convert to whichever investment vehicle gives you the risk/return that you want (BTC, ETH, XLM, VFIFX, US T-bonds, etc).

108 days and afterwards you make $1,500 income per month and you could travel the world and never have to work again if you don't want to?

Sounds like a pretty good deal.

What you didn't take into you account as well was the fact that this is $3,000 if Ethereum doubles in price, $4,500 if it tripes like you specified.

That income is not coming from mining Ethereum and, as time goes on, the amount of any coin you can mine diminishes (sometimes rapidly).

The only way to avoid diminishing mining returns as difficulty increases is to swap to a new, lesser known coin. Eventually you run out of coins to swap to or the ones you are mining don't go up in value (because if they did, bigger miners would come in and knock you out of the game as the difficulty shoots up). All the time your GPUs are ageing too.

If you want a steady income with arguably a lesser risk profile and more staying power than personal mining offers, why not put some money in to coins that offer node payouts?

It isn't really hard to mine profitably, you can look up which ones are profitable and choose out of over 1,000 coins, of which 100 are already above market cap of $500M, so that's not the bootleneck.

Yeah but you're forever capped at meager returns.

As soon as a coin's value increases, more mining hash power enters the scene and difficulty shoots up (ruining your profit margin). You then swap to another coin, eventually the same thing happens. Rinse, repeat.

During all of this, you still have to make back your initial investment on the GPUs and power, then you have usually another 6-9 months max before your entire rig is too outdated and you have to start again buying newer, faster cards (which will then take you another 3-5 months just to earn back your cost).

Just seems a very painful and slow way to cash in on the crypto bonanza (which isn't going to last forever).

If you want a steady income with arguably a lesser risk profile why not simply invest in low risk stock market?

There's no way all these coins [1] retain proper value compared to NASDAQ [2]. Take AAPL for example: ~48% [3] in one year. GOOGL for example: ~36% [4] on one year.

[1] https://whattomine.com/calculators

[2] http://money.cnn.com/data/hotstocks/index.html

[3] http://money.cnn.com/quote/quote.html?symb=AAPL

[4] http://money.cnn.com/quote/quote.html?symb=GOOGL

> £6 per card

which cryptocurrency is this? I'm only getting <£3/day mining ETH on my 1080ti..

I am using simplemining os to mine ALT coins (mostly equihash based) to miningpoolhub which auto exchanges to LTC for me. From there I send to coinbase -> gdax -> trade for either GBP or ETH depending on my mood!

If you're buying stuff on darknet markets it's nice to be able to do it with freshly mined coins that don't have transaction histories associated with them.

Haha, hadn't thought of that :) This reason makes sense to me.

Or use Monero which doesn't have transaction histories associated with it.

This would only apply to solo-mined block rewards. If you use a mining pool, there is a coin trail through the pool. The pool likely has the IP address records of your miners and can link these to your payout transaction.

Mined coin is only just a little less traceable than exchange purchased coin.

Why does it matter? Once you do the transfer, why would anyone refuse to send you the goods? It's not like they can reverse the transaction - only send back the equivalent amount in the best case.

Buying and holding an asset requires that you accept the risk that the value could fall. Miners can profit while minimizing their risk exposure by selling whatever they mine immediately.

>by selling whatever they mine immediately.

In this market that just seems like the equivalent of burning your money in the street.

Its simple: The risk taken is completely different! Mining is a much lower risk that yields less benefits.

I'm not sure I agree. Depending on what you're mining and when you start, you may never make your costs back.

If anything, at this point (especially with more and more new coins adopting PoS rather than PoW) I'd say it's more risky than just buying a stable coin (ETH, BTC, LTC etc) and sitting on it for a year (and that's before factoring in the risk of lost potential earnings had you simply bought rather than mined or that your mining pool gets hacked).

Most people mine ETH, though.

So your options there are to either buy ETH on the market, or invest in a miner that will pay itself off in 3 months with ETH, then just provide pure profit for as long as it's, well, profitable.

I would argue mining is much lower risk but has much lower potential for reward.

After paying off the card (<=4 months of mining) all earnings from mining can be converted to USD for example on a monthly basis. The odds of even 1/10th of major coins switching to PoS in the near future is very low.

I completely agree that just owning coins has way more upside and I suspect you'll do very well! But I prefer the asymetrical mining returns - I have lots of upside and almost zero downside versus extreme upside and extreme downside (crash in coin prices, hacks, regulation, etc.) from owning coins. But to each their own!

> A GTX1070 costs about $800.

Where on earth are you getting that statistic? Newegg sells GTX 1070 ti's for ~500 when they are in stock. Same with bhphotovideo.

Depending on what coin you mine you can net $8-10 dollars a day - then exchange it to ETH/LTC/XMR/etc.

Also factoring in the growth rate of the exchanged currency the ROI on that is less than 3 months.

>Where on earth are you getting that statistic?

I just stuck "GTX1070" in Amazon and that's the rough price that came up.

GPUs are on backorder almost everywhere. So suppliers that still have them are all at 2-3x the price. When they are in stock they are ~$500.

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