cryptothoughts: mining

Here are some of my thoughts on cryptocurrency mining. This is just for fun. And I'm just thinking out loud. This is more for those who don't mine, not those who are actually really good at it. Just like investing in cryptocurrency directly, some are good at it, many are not. Some do their research, many don't. Some think ahead, plan and strategize, run calculations and estimates. But most take a lazy gamble. Mining can be a similar experience for many people.

...At least as far as the average person is concerned. It's true that new mining opportunities open up regularly and if you get in on the ground floor you could see some real value in mining for some period of time. It's also true that Bitcoin Gold is on the horizon, and this is intended by its very nature to open up realistic mining for profit again to the average person equipped with a graphics card. But this does not change the fact that it remains and will always remain the weakest way to make money in cryptocurrency.

If you have money to spend on a custom mining rig that will net you a legitimate profit, invest the money directly into the coin itself. Some miners pull off a 5-month return on investment. Others take more like 18 months to break even. I don't have stats on this but I am guessing, just like with investing directly in cryptocurrency (or the stock market), many don't even make it there and actually lose money, foolishly neglecting to account for things like:

Bottom line: you can't compete with people who have major subsidization! And there are more and more people trying to get in the game all the time. But here's where you won't find nearly as many of those mining market disruptors: on an exchange trading actual coin.

This may sound like a silly comparison, but I think it is worth making. People have ben miners for thousands of years, and on an industrial scale for centuries now. In "real life" miners suffer devastating illness and injury that greatly shortens lifespans and generates incalculable misery. No one wants to be a miner, except perhaps in the perverse sense that it is literally their only opportunity to do something that would avoid starvation for themselves and their families. In this aspect, metaphorically stuck between a rock and a hard place, faced with nothing but horrid "choices".

Nevertheless, I think there are parallels in which it should still be true that one should not want to be a miner for a living or even part time.

The advantage will always go to people with subsidized costs and plenty of free time. Your kid could easily become a far more successful miner than you, with your financial aid of course. If no one buys your equipment for you and you have to hold down a day job or raise a family or have any number of other obligations keeping you busy, don't fuss with building mining rigs and earmarking thousands of dollars into physical equipment so that money is not earning for you. Instead, invest directly, be calm, relax, be patient, hold. Let someone else be your transaction bitch.

What I'm saying is, for the average person thinking about mining or investing, obviously do your research whichever way you go, but also stop and think for a moment. If you have the money to dive into either arena, would you rather be the suit and tie, or the poor sap with black lung? Do you want to spend $3,000 on an awesome mining rig and then run your rig 24/7 for a year and a half (depending on your costs, where you live, etc.) before so much as breaking even? If I said to you that you could put some money in the market now and start earning (or losing) immediately, but probably make a good return if you are patient and have any semblance of self-control, or on the other hand you could spend a large lump sum building a mining rig that you can hopefully successfully run 24/7 and then you will make your first penny a year from now, what would you prefer?

These are just some of my thoughts at the moment on mining in general. Of course, I can't get into every single nuanced issue so this post is not meant to address every pro and con to mining in 2017 and beyond. It's mostly intended to provide some cautionary thoughts to the average person who has never mined and who, if they tried it, would likely not bother with more than their own single-GPU system at home. If you can make about 75 cents a day (after electrical costs and such) with your GTX 1060, maybe one dollar with your 1070 (this is what I can max out after costs where I live) using your home computer, or even six dollars a day with a $2,000 - $3,000 PC build, is it worth bothering?

For me it most certainly is not worth it. I've done it for fun just to explore it but it was so clear to me that it was a wasteful endeavor. When Bitcoin Gold comes out soon, I may try again, again for fun. But my expectations are not high that it will much more worthwhile. For some in the right situation, mining is totally worth it, but those people already know who they are. For most people, I'd say aim higher. No one should want to be a miner when they grow up. Don't waste your money just to rub some digital soot on your face.