People Are Taking Out Mortgages to Buy Bitcoin as Price Soars

NickJames said:
The stock market is nothing like a Casino.
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Is that why the economy almost crashed back in 2008 and we bailed the banks out to the tune of trillions of dollars because they overextended on risky investments with money they didn't have? Because everything is so stable and isn't prone to collapse?
 
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Draax said:
I was reading an article recently about a local man who spent his life savings buying mining machines ... I couldn't help but feel bad for the guy. Reality is going to come crashing down one day, always does.
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While investing one's entire savings in a game of chance isn't a very prudent thing to do, people have been expressing similar thoughts to yours for many years, and yet have so far been consistently proven wrong.

Just as reality can be prices going down, and maybe even staying down, reality can also be prices going up, and staying up. Right now, reality is that digital coins are making a lot of people a lot of money. The guy you referenced could have made his money back in a year, and then whether or not the price crashes, he won't have lost anything.
 
Delicieuxz said:
While investing one's entire savings in a game of chance isn't a very prudent thing to do, people have been expressing similar thoughts to yours for many years, and yet have so far been consistently proven wrong.

Just as reality can be prices going down, and maybe even staying down, reality can also be prices going up, and staying up. Right now, reality is that digital coins are making a lot of people a lot of money. The guy you referenced could have made his money back in a year, and then whether or not the price crashes, he won't have lost anything.
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This is the price of electricity where this guy is mining: Off-Peak 8.3 cents per kWh / Mid-peak 12.8 cents per kWh / On-peak 17.5 cents per kWh. Im not sayin' ....im just sayin'
 
too many players in the game now that it's publicly traded.

This is a rehash of the housing bubble, where someone will be left holding the bag at the end.

Every time a big player makes a move, it could sink bitcoin prices.
Small time players, mom and pops, are gonna get jerked around.
 
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People are definitely getting manic around this. Is there a bubble? Sure. Will it crash? Yes. When? Nobody knows. Will it come back? Probably - this is not the first bubble and it has always come back. Can you time the market? Probably not - but if you can youll do well. Mortgaging your house to do it though? Thats just plain old gambling.
 
Smashing Young Man said:
It must suck to be poor . . . or at least feel poor, insofar as wanting so much more than you have now. I'm completely satisfied with all I have in life now. I'm not wealthy by most commonly used definitions, but I feel full. To go chasing something like this at such risk speaks of a miserable existence.
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Who says any of that applies to most of the sane people who have money in the stock market, or who mine/trade crypto? To me this is a fun little hobby that puts money in my pocket. I saw an opportunity in something I found interesting and fun and turned it into a nice monthly payout for what amounts to zero work and zero risk. Can't get much easier or fun than that.

Stock market, bitcoin, lottery tickets, beanie babies, doesn't matter what it is, there will always be people out there approaching opportunities or hobbies with the wrong mindset or the wrong understanding of how to grow your money. I've structured my little operation very slowly over time and with zero risk, bitcoin could go to zero tomorrow and I lose nothing. but every month that ticks by I'm $1500 richer even with no price increase.
 
Hazard said:
This one?

http://www.cbc.ca/news/business/bitcoin-mine-canada-1.4436149

He figures he's young enough to risk $100,000.
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With some rough math, and the fact he's already been running his little operation for at least a month or two by the time this article was written, he's already probably gotten more than 1/2 of his 100K investment back already. With my 20 GPU setup I make around $1200-1500/mo after expenses. Scale the cost of setup to his level and he would be clearing 25k a month.

Big risk sure - but to get out from under the gun pay off the initial investment quickly and then at that point it's nearly all profit minus electricity costs. It might be white knuckle for him for a few months but there are far worse ways to spend 100K.
 
collegeboy69us said:
Who says any of that applies to most of the sane people who have money in the stock market, or who mine/trade crypto? To me this is a fun little hobby that puts money in my pocket. I saw an opportunity in something I found interesting and fun and turned it into a nice monthly payout for what amounts to zero work and zero risk. Can't get much easier or fun than that.

Stock market, bitcoin, lottery tickets, beanie babies, doesn't matter what it is, there will always be people out there approaching opportunities or hobbies with the wrong mindset or the wrong understanding of how to grow your money. I've structured my little operation very slowly over time and with zero risk, bitcoin could go to zero tomorrow and I lose nothing. but every month that ticks by I'm $1500 richer even with no price increase.
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I'm speaking of those who'd do something like mortgage their home to buy bitcoins. That goes well beyond a fun little hobby into desperation or idiocy or both.
 
As long as folks realize that bitcoin is pure speculation at this point, the market is not liquid, and you may lose everything in a few days, power to them. Just don't come crying to the government for a housing bailout if your investment costs you your house. Spec stocks or in this case currency, are risky and normally crash and burn. Every so often you are fortunate enough to buy shares in a small retail outfit ran by a guy named Sam or a startup software company ran by a guy named Bill.
 
Smashing Young Man said:
I'm speaking of those who'd do something like mortgage their home to buy bitcoins. That goes well beyond a fun little hobby into desperation or idiocy or both.
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I won't disagree it's an extreme move, if I poured my home equity and bank account into it 6 months ago I could probably retire, but just stupid to risk everything I've worked for.

I'm of the firm belief though people can do whatever they want with their money. The difference between insanity and genius is measured only by success. Some of these people might set themselves up for life, just as equal chance of them going straight to the poor house. Either way it's no skin off my nose :)
 
Here's what I don't get... Why would they buy bitcoins and not just set up a couple of mining stations to mine for bitcoin? Is it the time on the return of investment? OR is it because of the extreme value of bitcoins today it makes more sense to let larger organizations professionally mine them as opposed to trying to get in on the game yourself?
 
Grimlaking said:
Here's what I don't get... Why would they buy bitcoins and not just set up a couple of mining stations to mine for bitcoin? Is it the time on the return of investment? OR is it because of the extreme value of bitcoins today it makes more sense to let larger organizations professionally mine them as opposed to trying to get in on the game yourself?
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simply, bitcoin has gone up 6x in the past few months. Theyre hoping to double their investment and get out perhaps. Perhaps some are more greedy, some more foolish.
 
Grimlaking said:
Here's what I don't get... Why would they buy bitcoins and not just set up a couple of mining stations to mine for bitcoin? Is it the time on the return of investment? OR is it because of the extreme value of bitcoins today it makes more sense to let larger organizations professionally mine them as opposed to trying to get in on the game yourself?
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I did the whole mining thing back in the day.

Originally when BTC was like $30 I got a $300 AMD card and made 12 BTC.

A few years later when BTC hit $600 I got some ASIC miners for like 3 BTC and only ended up mining 1 BTC. (The other miners never made it. Thanks BFL!)

So basically wasted my money once mining became too expensive.

If I spent even 10% of that money on just buying bitcoin at the price back then I would have made WAAAAAY more of a return.

So in a nut shell that is why mining is silly. It's cheaper to actually just buy the BTC than to mine it in many cases.


I have a buddy who dumped $5000 into mining and then sold 72 bitcoins for $2.50 each when he thought that bitcoin was dead. The dude is probably kicking himself right about now.
 
I'm actually trying to convince my company to inject a bitcoin mining javascript into it's home page. Ask employees who are not doing anything CPU intensive to leave it running to see if it can actually be an revenue stream for the company. What do you all think of that?
 
Grimlaking said:
I'm actually trying to convince my company to inject a bitcoin mining javascript into it's home page. Ask employees who are not doing anything CPU intensive to leave it running to see if it can actually be an revenue stream for the company. What do you all think of that?
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I think the guy who handles the electricity bill will have a heart attack.
 
btc too easily manipulated right now.
But damn, I'd like to be the winklevoss bros right now.
 
Kdawg said:
btc too easily manipulated right now.
But damn, I'd like to be the winklevoss bros right now.
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it's weird the media kind of refer to them as a single unit. They're the first to hit a billion? OK, but if that is 500m each, I bet someone else has more than 500m individually.
 
Teenyman45 said:
Casinos (of the non-indian variety) are better regulated and less likely to be as badly rigged.
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Bullfeathers.

As for bitcoin personally I think it's overvalued and a risky investment. People like to do dumb things with their money. OK.

I do a little alt coin mining myself as of late but I'd never bet the farm on any of this.
 
Twisted Kidney said:
That's a really bad idea. You don't mortgage your house for lottery tickets.

Good on you if you mine. Especially since most of the people I know who do it do it because they enjoy the system building. Spending tens of thousands of dollars on a gamble? Nah.

Of course, I wouldn't mortgage my house to invest in anything. The value of my house goes up real good like.
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I agree with you about the gambling, but my home is not going up in value to me. I pay $500 a month just in interest. thats money just being thrown down the crapper. value of my home in 2 years has increased by 7.5% roughly, but when you subtract taxes and interest i consider it a net loss. If you paid cash for your house, then yeah...
 
Let the market work it out, save up your money and wait for the crash, now there are cheap houses to buy on foreclosure, plenty of surplus video cards etc..... I bought my house during the 07 08 meltdown, got a great deal on it, was a wonderful house. I think the whole family will be enjoying all new GPUs in the not so distant future. I will defend bitcoin on one level, a lot of the big players in BTC have been in it for a long time, many with the idea of holding on for a long time. These guys have a vested interest in trying to prop the currency up. They may hold on looking for the next boom.
 
Serious Bitcoin mining is done with ASIC. People mining alt coins using GPU aren't likely to fire sell if Bitcoin crashes.
 
Riptide_NVN said:
Serious Bitcoin mining is done with ASIC. People mining alt coins using GPU aren't likely to fire sell if Bitcoin crashes.
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We have already seen fluctuations in GPU prices and availability due to mining, both increases and decreases. No matter how you spin it people are using GPUs to mine, and that means if interest in mining changes so does GPU availability. lots of situations can arise, such as smaller farms upgrading to ASIC and dumping GPUs. There was a time when people said GPUs were going to be dead and they couldn't be profitable mining with them that was years ago, and so far that hasn't happened. IMO all ASIC did was make the GPU market more volatile. But it certainly didn't kill it.
 
ASIC made GPU mining for Bitcoin unprofitable, but not necessarily for the other alt coins.
 
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