What the heck happened? R9 290 series price increase by $100?!

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blastingcap

Diamond Member
Sep 16, 2010
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If you want to get into a detailed analysis, each rig is just a cheap cpu, low ram stick, with a good PSU, for 4 cards. 18 such rigs x ~$300 = $5,400 on top of his GPUs.

I dont want to bother with all the other costs you listed since its highly variable, and if his house already has a big garage, he lives in a cold climate?? Replacing burned out PSU or cards? Warranty for that.

You can't just assume away the power, rent, other equipment cost, etc. That's what neophytes do, not professional businesspeople. That's like my saying "hey I want to start a business selling pizzas but I'll assume that my labor, rent, electric bills, etc. are free."

Replacing a burned out house and paying your neighbors--is there a warranty for THAT? You can't say "oh it's winter we'll ignore power bills," it doesn't work that way with 69 freaking GPUs, wtf, SIXTY NINE? Further, winter is only part of the year, what are you going to do during the rest of the year? If you're only into mining for one season, what is the point, you might as well buy coins directly.

When LTC was 2 bucks, $100k put directly into LTC would be worth $7.2MM today. If you had foolishly dumped $100k and tons of time/effort and risk into mining instead, you would be a lot worse off.
 
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x3sphere

Senior member
Jul 22, 2009
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Man, that's a lot of setup and installation work for... what... $200 a day once he gets all that set up?

That's assuming that he doesn't have to upgrade the wiring coming into his house to power all that equipment... it would likely take weeks for the power company to do that.

Hell, by the time he's finished setting up those systems the difficulty would have increased yet again. If the price of Litecoin doesn't go up with it, now he's only making $150 a day and dropping quickly.

If he's that passionate about Litecoin, he should just buy 500 of them and get it over with.

I remember that pic, seen that guy post on another forum. He got those cards awhile ago, and he's still holding onto the LTC. He's made well over $100K in USD I believe.
 
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Feb 19, 2009
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Power = already factored into the cost, at 10 cents a kWh in my original post.

Rent = dude owns a place already?

Cold climate = welcome to most places in north america, europe, russia all year round?

House fire, yeah, there is warranty for that, full coverage policy includes fire. Really. If you sunk $100K in LTC and see it crash and burn, you lost $$.
 

Subyman

Moderator <br> VC&G Forum
Mar 18, 2005
7,876
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Heck with litecoin, I should have bought more 290s haha. Glad I got one at launch. I was wondering why my buddy asked me about 290 prices a few days ago. He said he got a great deal at $399, I didn't think much of it until I saw this thread.
 

nwo

Platinum Member
Jun 21, 2005
2,309
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When LTC was 2 bucks, $100k put directly into LTC would be worth $7.2MM today. If you had foolishly dumped $100k and tons of time/effort and risk into mining instead, you would be a lot worse off.

Perhaps... but the risk with buying coins directly, especially when they are a few bucks or less than a buck each, is a lot greater than investing into hardware which you can still have a use for or sell with minor depreciation.
 

blastingcap

Diamond Member
Sep 16, 2010
6,654
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Oh so now you're changing the story to how he manages to cool off 69 GPUs in a garage? That's total bull, sorry. Even if you used no lights, microwave, phone, PCs/laptops/tablets, refrigerator, etc. and dedicated 100% to GPUs, there is no freaking way a regular residential line can power that. You'd have to put in a work order for $10k+ to get that much power, and likely it would be too much for your local distribution so you might have to get them to upgrade your local infrastructure which costs tens of thousands of dollars. The alternative is to rent something C&I with lots of amps, preferably 230V for higher efficiency, or server space or something like that, which also costs a lot.

I am willing to bet you a bitcoin that your insurance company would deny your claim if it found out you had 69 GPUs in your garage or whatever. Insurance companies try to wriggle out of paying up whenever possible. And then there's the liability/lawsuits you face from your neighbors in a worst-case scenario.

So your worst-case mining scenario is taking out your neighborhood and going bankrupt, if you were crazy enough to mine with 69 GPUs in your garage rather than rent a brick warehouse or something.

Even if you don't suffer catastrophe like that, if LTC goes to zero then the value of your CPUs, mobos, RAM, PSUs, video cards, etc. will also take a HUGE hit as all the mining equipment floods the market, so it's not THAT much protection to mine rather than buy coins. In the meantime, the power bills, rent, etc. all need to be paid if you mine. So you can find yourself in a situation where you spent $50k on mining equipment, $50k on power, and then LTC goes to zero after a year. You then resell the equipment for, say, $20k since only the GPUs and PSUs are really worth that much in bulk, and the GPUs will have depreciated over the course of a year and hard wear-and-tear. You ate $50k in power bills. So you lost $80k overall.

Whereas if you bough $100k of coins the most you can lose is $100k, which is very similar to $80k. Your worst-case direct purchase scenario is losing whatever money you put in. That's it. You can't lose more than you put in. No risk of catastrophic fire or anything, and no effort like making sure all the rigs are up, software updated, making sure no PSU is about to blow, etc.

If it were that easy to mine with 69 GPUs why don't YOU do it? Yeah, exactly. That's why most people don't mine with that many GPUs, it's not worth it.

Perhaps... but the risk with buying coins directly, especially when they are a few bucks or less than a buck each, is a lot greater than investing into hardware which you can still have a use for or sell with minor depreciation.

I already wrote about the risk thing a few posts ago, said for small scale miners buying stuff they would have bought anyway, it might be more of a risk hedge. But 69 GPUs?? That's a LOT of risk, and if you're such a true believer in a coin, you might as well just directly buy some and save yourself the headache. That's all I'm saying. 69 GPUs? :shakes head: You could simply direct-invest and skip the headaches. But don't invest more than you can afford to lose.
 
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selni

Senior member
Oct 24, 2013
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I'll tell you this... if/when a major retailer like Newegg or Amazon starts taking crypto coins, the price of Bitcoin and Litecoin are going to skyrocket

Honestly, I'm amazed that more online retailers aren't using Bitpay already. It allows you to accept Bitcoins for payment, but you still get paid in US dollars. The fees that Bitpay charges are less than the merchant fees for a credit card, and you don't have to worry about chargebacks.

As a currency bitcoin still hasn't really gone anywhere outside of operations like silk road - I suppose that's better than nothing, but it's not particularly useful for most people. The only reason they're worth anything is the belief that they'll be worth something in the future - ie they're a speculative commodity, not a currency.

It's also a particularly risky one because although the idea behind cryptocurrencies seems sound so far, there's no reason to think that any particular algorithm/blockchain will beat the others (eg why bitcoin over litecoin over whatever?). It's not speculators that have the power to decide which "wins" either, it's retailers and to an extent, governments.

Currently it does look a lot like a hype driven bubble over something that may not actually end up being worth anything at all (cryptocurrency seems like it will, but that doesn't necessarily mean bitcoin itself will be), but we'll see how it turns out I guess. You can still certainly make money on mining while the speculation continues, but be aware of the risk.
 
Feb 19, 2009
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If it were that easy to mine with 69 GPUs why don't YOU do it? Yeah, exactly. That's why most people don't mine with that many GPUs, it's not worth it.

Because its not. I have no space, I live in Australia, its freaken hot here. Power is also 30 cents a kWh. I have a wife and kids.

They objected to me throwing a few grand at buying coins when it was cheap. Going and buying 69 GPUs? You kidding?

And it IS easy, if the circumstances are right. Thats why there are many people who do indeed do it. Even in shipping containers.
 

SimianR

Senior member
Mar 10, 2011
609
16
81
You know what? It's not ridiculously hard. But most people don't have 17K lying around and the time to invest in ordering, setting up and maintaining all those rigs. If litecoin does end up tanking it would be quite annoying to have to sell all that hardware afterwards as well.
 

Subyman

Moderator <br> VC&G Forum
Mar 18, 2005
7,876
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You can run 69 Gpus on a 200 amp service with some room to spare. 200 amp isn't out of the ordinary.
 

BallaTheFeared

Diamond Member
Nov 15, 2010
8,115
0
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What do you do with the 25,000 watts of heat though?

lol only joking, but I was just trying to imagine what that would feel like...

When I had my cards in the garage it was great, but when I had them mining in our room I had to start using lotion because it was drying out the room.
 
Feb 19, 2009
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Realistically how much W would such a setup consume, I'm thinking 225 to 250W for each GPU, and ~25W for lowend CPU, MB, 1 stick of ram, no drives. About right?
 

Sunburn74

Diamond Member
Oct 5, 2009
5,034
2,613
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So, honestly to this day I still don't understand how a bitcoin or a litecoin has any actual value? I mean currency is backed by gold amongst other things. What is backing the value of a bitcoin? Can someone explain this in a nutshell for the layman without going into a whole philosophical diatribe about how no money has any real value anyway?
 

blastingcap

Diamond Member
Sep 16, 2010
6,654
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You can run 69 Gpus on a 200 amp service with some room to spare. 200 amp isn't out of the ordinary.

200 amp for new houses sure, some older houses have a lot less than that, I'm guessing typical might be 150 amps or so. Regardless of total household amps, you would have to be careful to avoid overloading individual circuits within the house. Further, most people like being able to run microwaves, stoves, fridges, PCs, phones, TVs, pools, radios, ovens, washer/dryer, etc. and not living in darkness next to dozens of hot, noisy GPUs.

House issues aside, Balla brings up a good point. How the hell to vent 17,500 watts + the wattage of your other appliances, microwaves, PCs, phones, etc.? That's what, 20,000 watts of heat to get rid of? You might be okay in cold parts of the world during winter but it won't remain winter forever and mining for just one season a year seems like a waste due to equipment depreciation and startup costs of setting everything up... Anyway, don't wind up like the guy who got brain damage from falling asleep next to his mining rigs on a hot summer day.

To Silver: PSU efficiency is not 100%, so the at-the-wall usage would probably be on the order of 17,500 watts/hour. That's about $3,750/month if you're paying $0.30/kWh over there in Australia like you said. That's $46k in power cost per year. Ouch. Even if you lived in a country where power were $.15/kWh, $23k/year is a lot. Then, after the crash to zero, you get to sell your gear for a pittance because so will everyone else and the market will be flooded with obsolete mining gear. So you get to eat tens of thousands of dollars in losses in power bills and then more money (and time) when you dispose of your obsolete gear.

Thus, large-scale mining is not that much less risky than buying coins directly. And the upside from such mining isn't as high as from buying coins directly. If you were just gonna buy a video card for gaming and mine on the side, then that's low-risk, but large-scale mining is inherently risky, and it's probably better to simply buy the currency directly.

So, honestly to this day I still don't understand how a bitcoin or a litecoin has any actual value? I mean currency is backed by gold amongst other things. What is backing the value of a bitcoin?

It's backed by psychology. That's why it's so volatile. Bitcoin's intrinsic value is zero because it is not backed by any government. In contrast, look at the US Dollar. Governments can compel people to pay taxes in fiat, and if you don't pay taxes, you get throw into jail or worse. US Dollars are backed by a gazillion troops, ships, planes, tanks, and nukes.
 
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Feb 19, 2009
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BC: Now that we are on the same page with numbers and such.. how many coins would such a setup have mined if it was started early this year?

At current difficulty, 42 mHa/s would get 477 coins a month. But a few weeks ago difficulty was nearly half that, and the month before, it was much much less. At the start of the year? Hardly anything at all. Would have made at my rough guess, probably somewhere around 50,000 coins (mostly in the first half of the year).

Such a setup would still be pulling in several hundred coins a month for a long long time to come.

Now, lets say such individuals live in Canada where its cold, they have a big garage in the backyard and had a 150-200 amp circuit already. Start up cost is simply hardware. ~$25,000 all up. It is a heck of a lot LESS risky than throwing $100K at buying coins. 7950s are still popular gaming cards due to their potential for OC, you could easily sell them off for $200 each and gamers would buy it.

But I do agree, if you are not risk adverse and had money, buying coins = no brainer.
 

Imouto

Golden Member
Jul 6, 2011
1,241
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Is that hard to rent a little warehouse at your local industrial park? Even now such a setup would throw more than $10k monthly in net profit.
 

blastingcap

Diamond Member
Sep 16, 2010
6,654
5
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BC: Now that we are on the same page with numbers and such.. how many coins would such a setup have mined if it was started early this year?

At current difficulty, 42 mHa/s would get 477 coins a month. But a few weeks ago difficulty was nearly half that, and the month before, it was much much less. At the start of the year? Hardly anything at all. Would have made at my rough guess, probably somewhere around 50,000 coins (mostly in the first half of the year).

Such a setup would still be pulling in several hundred coins a month for a long long time to come.

Now, lets say such individuals live in Canada where its cold, they have a big garage in the backyard and had a 150-200 amp circuit already. Start up cost is simply hardware. ~$25,000 all up. It is a heck of a lot LESS risky than throwing $100K at buying coins. 7950s are still popular gaming cards due to their potential for OC, you could easily sell them off for $200 each and gamers would buy it.

But I do agree, if you are not risk adverse and had money, buying coins = no brainer.

If the reason why one is afraid of buying coins directly is because coins may go to zero, then one should consider what would happen to the value of mining equipment if coins go to zero. It plummets. Just 2 months ago brand NEW 7950s were going on sale for as low as $150, and that's with LTC mining still profitable. Low-end CPUs, mobos, RAM aren't going to fetch much and you'd have to either take a LOT of time trying to sell them for cheap, or sell them in bulk for even less. PSUs might be worth something but many people are afraid to buy used PSUs for good reason.

Furthermore, all those monthly operational costs like power bills, replacing broken cards, etc.? You don't get to recoup those costs.

The point I've been making is that large scale mining is inherently risky and if coins go to zero, EVERYBODY gets hit, even miners. It's really not that much protection, and in the meantime, large-scale mining means a lot of headaches over all sorts of things like power, heat, replacing broken cards, updating software, coping with power outages, paying rent, etc. And if you manage to burn down your home and others, you go bankrupt which is a LOT worse than simply losing all your coins. Your insurance company is going to take one look at those 69 GPU husks they find in the rubble and laugh and tell you that kind of stuff isn't covered under their policy. If you think otherwise, read the fine print on your insurance policy.

Now, let's turn to your example. I think your estimate does not properly take into account all the hidden costs of mining, including expensive power supplies, power, etc. because you assume a specific set of circumstances like someone living where it's cold year-round, but let me just say this: LTC was less than 7 cents each at the beginning of 2013. Let's say $25k in startup costs and what, $25k more in power costs from mining to take your example. That nets you what, 50k coins to be optimistic? Guess what, $50k directly invested into LTC on Jan. 1, 2013 would have gotten you 714k coins. So you can spend $50k on mining and get 50,000 coins (plus a residual trickle of coins that diminishes as difficulty goes up; meanwhile your operating costs remain thousands of dollars per month), or spend $50k on directly buying LTC and get 714,000 coins. And that's assuming you're apparently living on a Canadian glacier or something, for everyone else, venting out 20,000+ watts of heat will be a big problem.
 
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Sunburn74

Diamond Member
Oct 5, 2009
5,034
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It's backed by psychology. That's why it's so volatile. Bitcoin's intrinsic value is zero because it is not backed by any government. In contrast, look at the US Dollar. Governments can compel people to pay taxes in fiat, and if you don't pay taxes, you get throw into jail or worse. US Dollars are backed by a gazillion troops, ships, planes, tanks, and nukes.

All the more reason I think its absolutely crazy that the value took off as it did. With nothing to back it, what is there to ensure inflation doesn't kick in or that someone doesn't just figure out a way to manufacture bitcoins?
 

nitromullet

Diamond Member
Jan 7, 2004
9,031
36
91
So, honestly to this day I still don't understand how a bitcoin or a litecoin has any actual value? I mean currency is backed by gold amongst other things. What is backing the value of a bitcoin? Can someone explain this in a nutshell for the layman without going into a whole philosophical diatribe about how no money has any real value anyway?

You should take a peek at the Bitcoin wiki. http://en.wikipedia.org/wiki/Bitcoin
 

blastingcap

Diamond Member
Sep 16, 2010
6,654
5
76
All the more reason I think its absolutely crazy that the value took off as it did. With nothing to back it, what is there to ensure inflation doesn't kick in or that someone doesn't just figure out a way to manufacture bitcoins?

People think inflation will never happen but there is a possibility that it would, due to the concentration of power in the bitcoin foundation. You'd have to pull a lot of strings with the big mining pools but it is definitely possible to get 51% of the network to agree to expanding the maximum number of bitcoins mined, thus defeating the current "limit" of 21 million BTCs. The hard limit of 21 million BTCs is actually not a hard limit. This would cause a hard fork of blockchains and chaos and possibly the complete abandonment of BTC.

The above scenario is not very likely, but it is one of several scenarios that would destroy BTC. Other scenarios include a rival system that is better than Bitcoin in some important way such as confirmation speed, or governments strangling exchanges since those are centralized even if the currency is not.

Bitcoin will go to zero someday, not soon, but sooner than some might think.

But this isn't bitcointalk.org and I don't want to derail this thread any more than I already have (sorry, OP). Now, let's go back to complaining about prices of cards in this and two other threads as if we needed three such threads.
 
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lopri

Elite Member
Jul 27, 2002
13,211
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It is a casino capitalism at its barest form. But hey, people like casinos and it seems like more and more states in the U.S. want to run them.
 
Feb 19, 2009
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Furthermore, all those monthly operational costs like power bills, replacing broken cards, etc.? You don't get to recoup those costs.

Apparently a lot of people think otherwise and hence we are in this current situation, massive sales of radeons, huge boost in workers and network hash and pics of dudes with way too many GPUs than sense... or unless, maybe they see it as a less risky proposition than throwing $$ to buy coins.

Most people (myself included) are very risk adverse and avoid even small potential risks. Thats why we aren't filthy rich, living the dream reserved for millionaires.. no risk, no reward, its true in almost every facet of life.

Luckily for us common folk, buying a bunch of GPUs to mine, within reason, is next to no risk for decent rewards. I'm not talking 69.. just 5-10, working away in the garage. Even that small amount, if it was going since the start of the year, would have many a ton of coins by now.
 
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