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

[blastingcap]

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.

If everyone is jumping off a cliff, does that mean you have to do it too? People who are like, "fine, I'll throw in $X because even if I lose it all it's okay" have a valid strategy too, and it's not necessarily any riskier:

Look at it this way, buying 5-10 GPUs and related equipment (CPU, mobo, RAM, PSU, etc.) and powering it for all of 2013 costs a lot, we'll say $7.5k for sake of argument assuming typical USA electric prices. But if you simply bought coins on Jan. 1, 2013 and held them till now, you would have gotten a much better return. In fact, buying just $700 worth of coins on Jan. 1, 2013 would put you in roughly the same position as someone who spent $7.5k on mining equipment on Jan. 1, 2013.

Which is riskier if coins go to zero? Mining is riskier. The miner eats thousands of dollars in unrecoverable power bills and depreciation (extra dose of depreciation when coins go to zero, as GPU resale value will also go down), whereas the buyer loses only $700. And the buyer has no hassles of babysitting rigs or risking fire or some other catastrophic failure.

And that's kinda the point: if coins go to zero, everybody hurts: miners AND traders. Just because you mine instead of trade doesn't really protect you from risk. The only people with relatively low risks are those who would have bought a 7950 or whatever ANYWAY for non-mining reasons, such as for gaming. Larger-scale miners and people who buy coins directly bear way more risk.

Damn it we're derailing the thread again... sorry OP. OP I'm going to do my part to stop the derail by refraining from posting again... Silver, if you want to talk about this more PM me. P.S. There are limits to coin diversification. If a big coin goes down like bitcoin it will drag down every other coin with it. The reverse is also true, where bitcoin rising pulls up everything else, which is why even the scamcoins have increased in value. This effect happens in lots of markets, such as precious metals markets. As for physical vs. not, see above about the true nature of risk. Buyer loses $700, miner loses $thousands.

 

[Erenhardt]

Edit: LOL. nvm, USA is running 120V D:

 

[Silverforce11]

You also need to factor in that if a particular mined coin goes bust, your hardware is still relevant to mine a different coin for example. Thats an option besides the recuperation of selling it on Ebay. But if your investment goes bust before you can rush sell it to recuperate costs, its gone. Done and dusted.

Hardware is tangible, its present in reality. Coins are just digital without an intrinsic value. Therefore it is by default, the less risky option and ALSO by default why so many people even bother to mine at all, rather than throwing a few K at buying coins.

 

[Imouto]

blastingcap dude, if you are mining you usually set a threshold to sell your mined coins. That depends on every single miner out there. Some are fine selling them at $20, others at $40 but coming from $5 levels at this difficulty it's still a pretty neat profit cashing them out every day. Your scenario is as crazy as mining Litecoins now and keeping them hoping to reach Bitcoin levels sustaining massive power bills and hardware maintenance.

All your premises fit your agenda to make an non sustainable argument with Silverforce11.

Spend $2500 if you can and cash out $26 daily at $0.30 kW/h. Things go south? Sell the hardware.

 

[blastingcap]

blastingcap dude, if you are mining you usually set a threshold to sell your mined coins. That depends on every single miner out there. Some are fine selling them at $20, others at $40 but coming from $5 levels at this difficulty it's still a pretty neat profit cashing them out every day. Your scenario is as crazy as mining Litecoins now and keeping them hoping to reach Bitcoin levels sustaining massive power bills and hardware maintenance.

All your premises fit your agenda to make an non sustainable argument with Silverforce11.

Spend $2500 if you can and cash out $26 daily at $0.30 kW/h. Things go south? Sell the hardware.

The foolish miner who spent $7.5k on mining equipment in Jan. 2013 and who sold-as-he-went would have generated a pittance. If you bail you get to sell depreciated assets, and if you bailed because coin prices crashed, the market will be flooded with others like you, further devaluing what you have. What the hell is the point of mining if you're just going to make a tiny return? I'm not going to explain things again. Good night.

 

[Imouto]

The foolish miner who spent $7.5k on mining equipment in Jan. 2013 and who sold-as-he-went would have generated a pittance. If you bail you get to sell depreciated assets, and if you bailed because coin prices crashed, the market will be flooded with others like you, further devaluing what you have. What the hell is the point of mining if you're just going to make a tiny return? If people want a crummy return they can buy mutual funds or something, why bother with mining at that point. I'm not going to explain things again. Good night.

No. The foolish miner that cashed out his coins daily paid his computer long ago and has been making a profit since them. Pittance? Sure. But once your ROI is over you can take more risk and keep your coins longer.

You're taking this as something else than a hobby that happens to return some profit. The dumb thing is to think of mining as some reliable or professional income source.

Again you're thinking of these currencies as something with some kind of value when they're just tokens for trading. Everyone realized long ago that this thing is cool to avoid taxes and other fees but a hell no for anything else than massive speculation and old school boys like you don't get it at all. Do you really think that anyone is storing any of these currencies that may worth nothing tomorrow? No, the strong point in all this is the trading flow.

Now seriously, do you think that an online store keeps its coins more than a few hours? They would be dumb as it can get. No, they cash them out and avoid taxes, fees and government control.

 

[blastingcap]

No. The foolish miner that cashed out his coins daily paid his computer long ago and has been making a profit since them. Pittance? Sure. But once your ROI is over you can take more risk and keep your coins longer.

You're taking this as something else than a hobby that happens to return some profit. The dumb thing is to think of mining as some reliable or professional income source.

Again you're thinking of these currencies as something with some kind of value when they're just tokens for trading. Everyone realized long ago that this thing is cool to avoid taxes and other fees but a hell no for anything else than massive speculation and old school boys like you don't get it at all. Do you really think that anyone is storing any of these currencies that may worth nothing tomorrow? No, the strong point in all this is the trading flow.

Now seriously, do you think that an online store keeps its coins more than a few hours? They would be dumb as it can get. No, they cash them out and avoid taxes, fees and government control.

Lmao. The return on mining for most of 2013 sucked and it would take months to pay off a high-end GPU let alone the CPU, RAM, mobo, PSU, etc. The only low-risk mining play was to use equipment you already had for other purposes But man, forget that, just look at that bolded part up there. It cracks me up. How many times did I say that I wasn't talking about guys using equipment they already had or were going to buy, but that I was talking about larger-scale operations? How many times did I write that cryptocurrency is inherently very risky? I repeated that ad nauseam, and yet you somehow you still wrote that bolded stuff up above. Seriously? Then, despite your utter misreading of what i wrote, you then attempt to insult me by calling me a "old school boy" whatever that is supposed to mean... lamest attempted insult ever? I've seen enough low-quality posts by you to know that I should just Ignore you, so welcome to my Ignore List. Please put me on yours, too. It's better that way.

 

[ultimatebob]

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.

Yeah... he made money because he got in early while Litecoin was cheap and much easier to mine. If someone tried the same stunt starting now, they would be lucky to break even after six months unless the value of Litecoin skyrockets.

 

[AnandThenMan]

This guy things selling out is actually a bad thing

 

[Silverforce11]

This guy things selling out is actually a bad thing

"Timothy Green owns shares of Nvidia. The Motley Fool recommends Nvidia."

 

[blackened23]

"Timothy Green owns shares of Nvidia. The Motley Fool recommends Nvidia."

AMD may end up selling more high-end cards than NVIDIA in the near term due to Litecoin mining demand. But if the cryptocurrency gains the kind of acceptance that Bitcoin has achieved, then specialized mining hardware will inevitably make GPUs obsolete for the purpose. That's exactly what happened with Bitcoin, and it's exactly what will happen to any cryptocurrency that goes mainstream.

What this means is that this increased demand is not sustainable for AMD, and any benefits will likely be short-lived. In the long term, the fact that AMD's high-end cards are in short supply may actually be a negative for the company. Since the 280X and 290X are being bought out by Litecoin miners, gamers looking to buy the card may not be able to find available inventory, turning to NVIDIA products instead. So even though AMD will sell more graphics cards in the short term, NVIDIA may eventually gain share of the gaming GPU market.

Looks like factual statements to me. Gamers didn't change what they buy, for the most part. People buying cards in lots of 100s for mining? Most of them don't give a crap about games.

 

[AnandThenMan]

So even though AMD will sell more graphics cards in the short term, NVIDIA may eventually gain share of the gaming GPU market.

I'm having a hard time parsing this statement.

 

[ChuckFx]

So when do you guys expect a revert back of the prices. Do you think they will go down with arrival of non-reference or we will have to wait a certain deppreciation before it happens?

I fear that Newegg and the other etailers will want to capitalize for a long time with those prices.

 

[blastingcap]

I'm having a hard time parsing this statement.

Nobody cares about some NVidia shareholder trying to convince himself and others on some other internet forum (Fool is like SA/HuffPo, where just about anyone can stand on a soapbox and blather) that AMD's sales benefits Nvidia. People who want AMD will simply wait for AMD, which offers better bang for the buck in normal times (when cards sell for MSRP, not above it). People who want "the best" are going to buy 780 Ti's no matter how bad the bang for buck is anyway. As for everybody else, most people aren't so impatient that they are unable to wait a while longer, especially since many people also own consoles so they are likely to simply pass on upgrading video cards this Xmas and buy a PS4 or XBO instead. Furthermore, the high end of the market is a tiny % of sales, and a somewhat larger but still relatively small % of profit. The bulk of the market is at 270X or below, where there is plenty of stock available and where the real war is being fought in terms of market share.

As for FPGAs that won't affect the near term so the author is comparing apples and oranges. You can't talk about an Xmastime glut and then talk about FPGAs/ASICs that aren't here yet and be credible.

You shouldn't have even linked to his opinion piece, because it was such an unworthy piece of diarrhetic dog doo-doo. Nobody cares about his ridiculous rationalizations. You shouldn't, either.

A far better argument is that if mining stops being in vogue, there will be a glut of used cards on the market that would depress sales of new cards. That might end up being true; you see stuff like that in other industries where companies can't sell new inventory because there's still a glut of marked-down older inventory on shelves. Only time will tell.

P.S. In the unlikely event that that guy is a member here, what I really meant to say was that I respectfully disagree with his opinions as they appear to conflict in terms of time horizons and where the bulk of the market share lies (sub $200 cards, the range where there are plenty of Radeons in stock).

 

[blackrook]

I'm having a hard time parsing this statement.

The logic is simple. When ASICs eventually become more power efficient at mining than the AMD GPUs, they are going to be offloaded en masse. However, by then the holiday season will have ended and gamers who had been in the GPU market will have already made their next long-term upgrade (which will comprise mostly of Nvidia cards seeing as how they are the only cards in stock).

Basically, the miners have temporarily forced gamers out of the market for AMD cards, turning them to Nvidia. But miners are nowhere as likely to become long-term customers.

 

[Final8ty]

The logic is simple. When ASICs eventually become more power efficient at mining than the AMD GPUs, they are going to be offloaded en masse. However, by then the holiday season will have ended and gamers who had been in the GPU market will have already made their next long-term upgrade (which will comprise mostly of Nvidia cards seeing as how they are the only cards in stock).

Basically, the miners have temporarily forced gamers out of the market for AMD cards, turning them to Nvidia. But miners are nowhere as likely to become long-term customers.

But it does not matter because the bottom line is a sale is a sale.

It does not matter if AMD could of sold 5000 290/280 cards to gamers over Xmas but because they are snapped up so quick and the price hike most of them bought NV cards but then AMD sold 30000 priced hiked cards to miners in the same time period.

Its not like the Gamers pay a monthly subscription to AMD or NV and that the 5000 gamers would of been more profitable in the long term.

 

[AnandThenMan]

The logic is simple.

It's bizarre logic and really makes no sense. But I didn't initially notice the source (author) of that article so, I get the motivation now.

 

[Silverforce11]

But miners are nowhere as likely to become long-term customers.

Its over 4 years and still going stronger than ever, what makes you say such nonsense?

ASICS for scrypts? Wake me up in a few years when its possible. Even then, GPUs will switch to a new altcoin that ASICs can't touch.

 

[blastingcap]

ASICS for scrypts? Wake me up in a few years when its possible. Even then, GPUs will switch to a new altcoin that ASICs can't touch.

Scrypt FPGAs are reportedly already under development.

It is very unlikely that we'll see any copycat coins take off the same way as BTC and LTC, similar to how there is only room for 2, maaaaybe 3 phone OSes (iOS, Android, and a bunch of also-rans). A third currency would have to be revolutionary to gain market share. By the time a revolutionary third currency forms, either cryptocurrrencies would have all failed, or bitcoin will have become too dominant to dislodge with litecoin a distant second. Like Blackberry's OS, it's actually got some neat exclusives, but it's not revolutionary and there just isn't an ecosystem around it. Similarly, x86 and ARM are dominant microprocessor archs and everything else is an also-ran. Network effects are just too powerful; market share begets market share. Thus it's true that GPU mining is not a permanent customer base, though it's a longer lasting one that the author of that tripe said.

 

[sontin]

But it does not matter because the bottom line is a sale is a sale.

It does not matter if AMD could of sold 5000 290/280 cards to gamers over Xmas but because they are snapped up so quick and the price hike most of them bought NV cards but then AMD sold 30000 priced hiked cards to miners in the same time period.

It matters. AMD produces less cards than nVidia. If they sell now more to other markets they will have a shortage. And this will force "gamers" to buy a nVidia card.

In the end it boosts nVidia position in the pc market and makes AMD weaker.

 

[Final8ty]

It matters. AMD produces less cards than nVidia. If they sell now more to other markets they will have a shortage. And this will force "gamers" to buy a nVidia card.

In the end it boosts nVidia position in the pc market and makes AMD weaker.

If AMD sells all that they can make it does not matter who is buying them.
If gamers buy them all up or miners buy them all up its makes no difference at all, the only thing that can make AMD position weaker is if AMD cant make as many cards as NV and not who bought them.

So lets get this clear forget the miners for the moment and lets say the shortage at the moment is because gamers bought them all up so it leaves the rest of the gamers having to buy NV cards, you see no difference.

 

[sontin]

If AMD sells all that they can make it does not matter who is buying them.
If gamers buy them all up or miners buy them all up its makes no difference at all, the only thing that can make AMD position weaker is if AMD cant make as many cards as NV and not who bought them.

Right.
So the next time you will say people will make games for the Titan Supercomputer because it doesn't matter who is buying GPUs. :|

People who bought cards for mining will not use them for gaming.

 

[AnandThenMan]

People that buy AMD cards for mining have money to buy more AMD cards for gaming.

 

[Gloomy]

Oh please. Dogecoin is taking over.

 

[Silverforce11]

People that buy AMD cards for mining have money to buy more AMD cards for gaming.

Winner. I bought my R290s, its now paid off 1. Im gonna use it to fund future upgrades, buying more AMD GPUs to game or mine with.