Clearly, the majority of people throwing money at Bitcoin generation do not really understand what they are doing
Open cost mining
Who is really making money from Bitcoin?
I've been crunching the numbers, and I cannot understand the prices people are paying for second-hand or low-spec Bitcoin mining gear. At the low end (.333 GH USB sticks, going for 34 quid, or so) the cost of purchase is never going to get repaid even at current difficulty, and that doesn't allow for the energy costs of the process. For the next tier (6/7/8 GH ASIC rigs) they MAY just about pay for themselves before they get out-paced by the newer equipment. People lining up to get 300GH/600GH/2TH and upward only have a very limited window of opportunity to make maybe a couple of thousand dollars before their rigs become obsoleted by the inexorable growth in numbers. For instance, Butterfly labs were taking advance orders on 300 and 600GH cards in August, for delivery in January. By then they'll just about hold their own. Now they're taking advance orders for 2TH rigs, which although vastly more expensive, will only be about as competetive when they reach market as the 600s when they start arriving imminently. It's a pointless exercise throwing any money at it now. The time to get in was January this year.
I don't think many people jumping on the band-waggon really understand the processes involved, and mistakenly think of it as free money (a mis-perception the hardware manufacturers are only too happy to see perpetuated). And that, folks, is the scam.
