Why aren't you mining?


I posted this earlier on REDDIT, and I thought maybe some folks here might benefit from reading this:

Q: Is there any money to be made in mining anymore?

So here’s the thing - people mine for different reasons, but one of the smarter ones is this; Mining is like buying bitcoin every minute of every day regardless of the price. It’s a way of accumulating bitcoin in a very disciplined fashion (and learning something great and having fun doing it). Every financial expert will tell you one simple thing that leads to being wealthy - invest what you can as soon as you can and regardless of other factors. Mining does this.

Consider - bitcoin is selling for roughly $325 per coin today. If you have $32.50 in your pocket, you buy 0.1 BTC and put it away. But next week, bitcoin is $400 and you don’t have the $40 in your pocket. You don’t buy any because it’s too expensive for you at the time. Draw this out for a month as the price of bitcoin continues to rise as the halvening draws closer. You need more and more change in your pockets to invest, most times you don’t. You’re not accumulating wealth because the price to buy in when you have it is rising. You’re missing the boat.

Now, if you invested $1500 in a rig and run it, you are accumulating bitcoin, every minute of every day regardless of the price. You pay the electric bill every month - that is your cost of purchasing. That price doesn’t rise with the price of bitcoin. You’ve locked in your costs - the price of the rig (capital investment) and the cost to run it (continuing ‘maintenance’ or recurring costs).

Ultimately, by mining, you are betting the price will rise (a good bet) to cover all the costs and have what’s left over as your nest egg. This is why some very smart people are mining (sometime even at a short-term loss), and also why they are telling you not to… because they don’t want their returns to tank because you are competing for their coins in some small way (by pushing the difficulty up).

So does this give you a better understanding? If you can afford an efficient ASIC like an S7 or an Avalon 6, and cover the power costs, and stand the heat and noise, you’ll be the better off for it. Investing in old ASIC hardware that’s less power efficient just because the initial capital investment is cheaper doesn’t make a whole lot of sense, unless you are getting a hugely great deal. If you are a beginner, it’s likely you can’t grasp the intricacies of the crypto economy (resale vaue of ASICs, etc.) so just save to buy the newest rig you can afford, and go to it.



Is winter time, best time to start mining.
Electricity is used to heat and have to be spend anyway.

For me, mining is a smart heating system :slight_smile:
If you don’t overheat, your electricity budget will not change and you will be able to reduce the heating cost with mined BTC. A obsolete miner can still be 100% profitable in that way.


There is an obvious question here that you skillfully avoided :smile:

If my mining is predicated on the expectation that BTC will rise and I have $1500 why shouldn’t I buy $1500 worth of BTC and avoid the risks of difficulty, power cost increase, mining rig failure, uncertain resale value etc?


I wasn’t hiding from that overused mantra, “just buy coins with what you have, you’ll be better off.” It’s almost as overused as, “mining is dead.” Neither really gets you where many would like to be in the long run.

As we all know, bitcoin rises and falls in value as the wind blows. If the price is at $325 as I used in my example, and I think it’s the lowest it’ll go from now on (trying to ‘buy at the bottom’, LOL) and it tumbles $100 in value in a week, I’m under pressure to, perhaps, limit my losses. Do I sell and try to re-buy later, maybe? I view the investment with some disdain - psychologically it puts me in a position to question my initial investment, and certainly puts a drag on making any future investments… If you aren’t disciplined about buying, up or down, you aren’t accumulating towards a future goal be that twelve months form now or twelve years from now. Setting your cost basis of your investment at a price point of $325 creates problems and can put pressure on you to become a trader - and as many of us here know who have tried out hand at trading on exchanges, it rarely goes well.

Remember, casual investors aren’t traders, and those that think they are traders, more often than not, get eaten alive by those who understand those market swings. If you take the rote guesswork out of ‘buying’ bitcoin through mining, it makes you a much smarter investor for the long run.

I could have talked more about cost basis investment, but we’d have ended up in the same place. The people that understand buying whether the market is up or down don’t need to read what I wrote here. They understand that principle full well and have been using it for years to accumulate wealth. I wrote this more to help people to understand what kind of value mining can have to making you a smart, disciplined investor in the crypto space.


@rootdude: What about the block size? You did’t mention the main big reason…Why the mining is so hard even through ASIC machines?


Block size has nothing to do with the timing of how quickly they are found. A block will be found in +/- 10 minutes regardless of the amount of data payload in the block - the difficulty of the network adjusts to accommodate such a change transparently and automatically.


says it all for me.


Thanks for the nice write up @rootdude.

While it’s not mining, another great option for “accumulating bitcoin in a very disciplined fashion” like you said, is Lawnmower as @nemesio pointed out on Slack a couple of weeks ago.

It’s a super easy way to make small, automatic BTC purchases with your spare change multiple times/month depending on how many transactions you typically have with a particular bank account, without ever having to think about it. Think of it as a change jar for BTC.

I’ve been using it for going on three weeks now and am loving it. I’ve already put away nearly 0.1 BTC with it.