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I've been meaning to sit down and type this out for a while now... This post is bound to trample some toes and get some undergarments properly knotted, but I'm genuinely curious as to opinions and views from the mining community.
1. GPU mining, BTC & its followers
There are a couple of decently sized GPU farms on the forum - but at the current pricing vs difficulty, you would struggle just to get an ROI on the depreciation portion on the cards if you're planning to sell them second-hand after a few months - and that's provided you're not paying for electricity. BTC pricing is crappy at the moment - so are the guys that persist in GPU mining simply speculating and waiting for the day that BTC will supposedly soar back to the $1000 mark and beyond?
BTC may very well be played out... By technical analysis, it's on a long-term downward trend.... fundamentally, it had its boom thanks to China, the single largest potential economy to support it, and took its dive when the Chinese government and banking governance all but outlawed it. The US is on the fence about BTC, but the FBI still stockpiles the Silk Road seizure, and has the potential to trigger a panic sell and resultant market crash if they feel like it... heft in hand over an emerging economy.
So what justifies speculating BTC? It's a long shot right now - and a plenty expensive gamble if you're buying BTC at $450 a pop or producing them at an even higher cost.
LTC has been stagnant for a while now - hovering between $10-11, down from its highs... Doge is mostly flat as well... the rest of them, meh... I dunno if they'll be sustainable in the long run, or fade into obscurity... but as things stand, LTC, Doge, and the other small handful of well-established virtual currencies are trending in the footsteps of BTC..
So why mine them??
2. ASIC / Scrypt miners --- Yeah son... we're gun be rich! Or are we?
So now dedicated Scrypt miners are finally going mainstream, causing the entire mining community to have collective wet dreams about the potential and all the bucks to be made... but no one seems to give a second's consideration to the notion that these devices are consciously being held back on a progressive rollout curve to capitalize on the money to be made at each stage of adoption?
Yes, you read right... Gridseed, the great revolutionary hope for Scrypt mining, is selling products to make YOU money? Uhm, no... the world doesn't work that way - but more on that in a bit.
Gridseed knew that the mid-April pricing on a 5.2 MH/s Blade miner had a 6-7 month ROI if you're mining LTC's or Dogecoins - and that's before you even factor in difficulty increases along the way.. But it's a marginal concern, and there were obviously adopters who would have a go... Already, if you buy a Blade now, you're looking at a minimum of 9 months for ROI. But wait, there's more - they're now unveiling the amazing new Black Widow (13), Falcon (27) and War Machine (54 MH!) miners... to only be shipped by the end of May (at a premium) or the 2nd week of June if you'll wait it out (at a 10% discount nogal) - but hey, the price per MH/s is soooo much better than the Blade.
Too bad it won't be so cutting edge in a month or two from now - when bigger and better things will be on the horizon, because the difficulty level moves up at a furious pace thanks to a paradigm shift in mining speed seeing all the new blocks being mined so quickly.
What happens then to all the guys that shelled out nearly $3k for a Blade? No return on investment for you, sorry bro... but buy our 110 MH/s mammoth and try again.
What was stopping Gridseed from developing the War Machine months ago when the first ASIC Miners came out? Nothing... the technology hasn't changed - it's just more of the same chips - chips that cost a dollar or two to produce... but stimulate demand, plan your rollout schedule carefully, control the market, and you can charge whatever you like.
You see what I meant when I said that the world doesn't work this way? If these Scrypt miners were going to be so profitable - WHY WOULD YOU SELL THEM? - If it really were profitable, Gridseed as a company would be running their own farm spanning many acres of land - and would be raking in all the virtual coins themselves.
Unless they already are? Hmmmm... Conspiracy theory in the making? Or common sense?? They develop miners, running them for months while they're ahead of the curve, mining them lots of lovely coins, and once the difficulty curve just staaaaarts to turn, they decommission them, package them and sell them off online. And you thought your ASIC miner just looked a little bit used thanks to the extensive "in-house testing" before shipping? And the failure rates are simply thanks to it being an exciting new & emerging technology? Riiiight.
Don't get me wrong - early adopters on BTC and LTC made money - some lucked out bigtime thanks to the boom... some lost a sizeable whack of cash when it tumbled again... but right now, things are looking somewhat grim for the virtual currency world.
So what say you Carbonite? Am I smoking my socks? Or is this the 21st century's world-wide digital version of the ponzi scheme?
Bawb
1. GPU mining, BTC & its followers
There are a couple of decently sized GPU farms on the forum - but at the current pricing vs difficulty, you would struggle just to get an ROI on the depreciation portion on the cards if you're planning to sell them second-hand after a few months - and that's provided you're not paying for electricity. BTC pricing is crappy at the moment - so are the guys that persist in GPU mining simply speculating and waiting for the day that BTC will supposedly soar back to the $1000 mark and beyond?
BTC may very well be played out... By technical analysis, it's on a long-term downward trend.... fundamentally, it had its boom thanks to China, the single largest potential economy to support it, and took its dive when the Chinese government and banking governance all but outlawed it. The US is on the fence about BTC, but the FBI still stockpiles the Silk Road seizure, and has the potential to trigger a panic sell and resultant market crash if they feel like it... heft in hand over an emerging economy.
So what justifies speculating BTC? It's a long shot right now - and a plenty expensive gamble if you're buying BTC at $450 a pop or producing them at an even higher cost.
LTC has been stagnant for a while now - hovering between $10-11, down from its highs... Doge is mostly flat as well... the rest of them, meh... I dunno if they'll be sustainable in the long run, or fade into obscurity... but as things stand, LTC, Doge, and the other small handful of well-established virtual currencies are trending in the footsteps of BTC..
So why mine them??
2. ASIC / Scrypt miners --- Yeah son... we're gun be rich! Or are we?
So now dedicated Scrypt miners are finally going mainstream, causing the entire mining community to have collective wet dreams about the potential and all the bucks to be made... but no one seems to give a second's consideration to the notion that these devices are consciously being held back on a progressive rollout curve to capitalize on the money to be made at each stage of adoption?
Yes, you read right... Gridseed, the great revolutionary hope for Scrypt mining, is selling products to make YOU money? Uhm, no... the world doesn't work that way - but more on that in a bit.
Gridseed knew that the mid-April pricing on a 5.2 MH/s Blade miner had a 6-7 month ROI if you're mining LTC's or Dogecoins - and that's before you even factor in difficulty increases along the way.. But it's a marginal concern, and there were obviously adopters who would have a go... Already, if you buy a Blade now, you're looking at a minimum of 9 months for ROI. But wait, there's more - they're now unveiling the amazing new Black Widow (13), Falcon (27) and War Machine (54 MH!) miners... to only be shipped by the end of May (at a premium) or the 2nd week of June if you'll wait it out (at a 10% discount nogal) - but hey, the price per MH/s is soooo much better than the Blade.
Too bad it won't be so cutting edge in a month or two from now - when bigger and better things will be on the horizon, because the difficulty level moves up at a furious pace thanks to a paradigm shift in mining speed seeing all the new blocks being mined so quickly.
What happens then to all the guys that shelled out nearly $3k for a Blade? No return on investment for you, sorry bro... but buy our 110 MH/s mammoth and try again.
What was stopping Gridseed from developing the War Machine months ago when the first ASIC Miners came out? Nothing... the technology hasn't changed - it's just more of the same chips - chips that cost a dollar or two to produce... but stimulate demand, plan your rollout schedule carefully, control the market, and you can charge whatever you like.
You see what I meant when I said that the world doesn't work this way? If these Scrypt miners were going to be so profitable - WHY WOULD YOU SELL THEM? - If it really were profitable, Gridseed as a company would be running their own farm spanning many acres of land - and would be raking in all the virtual coins themselves.
Unless they already are? Hmmmm... Conspiracy theory in the making? Or common sense?? They develop miners, running them for months while they're ahead of the curve, mining them lots of lovely coins, and once the difficulty curve just staaaaarts to turn, they decommission them, package them and sell them off online. And you thought your ASIC miner just looked a little bit used thanks to the extensive "in-house testing" before shipping? And the failure rates are simply thanks to it being an exciting new & emerging technology? Riiiight.
Don't get me wrong - early adopters on BTC and LTC made money - some lucked out bigtime thanks to the boom... some lost a sizeable whack of cash when it tumbled again... but right now, things are looking somewhat grim for the virtual currency world.
So what say you Carbonite? Am I smoking my socks? Or is this the 21st century's world-wide digital version of the ponzi scheme?
Bawb