By the way don't forget you ARE supposed to pay taxes on mining profits. Since so many of us use coinbase, this can get reported the government. You don't want to be on the wrong side of an audit. Keep receipts and records of all transactions. This is another hassle for those of you new to mining. But it is good business experience!
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Too late to start mining?
- Thread starter Mr. Baz
- Start date
Would "profits" be considered anything you've cashed out / converted into USD?
Once you receive payment in any form you must taxes. Crypto is treated as property and you pay capital gains for any growth in value. Cash is also treated as profit.
Personally I’ll just pay final end of the year taxes on any final cash I pull out throughout the year. Technically I think you are supposed to do this quarterly, but I don’t really know how to do that.
Personally I’ll just pay final end of the year taxes on any final cash I pull out throughout the year. Technically I think you are supposed to do this quarterly, but I don’t really know how to do that.
margrave
Weaksauce
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If breaking even on a video card costing $300 or $500 takes six months, then why would anyone want to take part in this?
I can earn $300 or $500 in a couple of days at an ordinary job. And there's no break even point. It's straight up income from day one.
I can earn $300 or $500 in a couple of days at an ordinary job. And there's no break even point. It's straight up income from day one.
Missing the point
2[H]4U
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Umm... sad that I have to explain this, but here goes.
100% return on investment in 6 months is HUGE. Normal return on investment is, what, 10% a year? 15% a good year? We're talking 200% in a year. At the end of 6 months you have a completely paid for money generating machine, that can continue to make you money.
But you can go to work and earn $300 or $500 in a couple days? GOOD, I would fucking hope so.
Guess what? While you're making that money, you'll ALSO be making money with your rigs. It makes you money while you work, while you sleep, while you're on vacation, while you're taking a shit... all the time! This is not replacement income, this is additional income.
I thought all that shit was obvious, but apparently not.
The self-employment tax structure for 2017 is:
https://www.fool.com/retirement/2016/12/16/capital-gains-tax-rate-for-2017.aspx
- 15.3% on the first $127,200 in net self-employment income.
- 2.9% on any net self-employment income above $127,200.
https://www.fool.com/retirement/2016/12/16/capital-gains-tax-rate-for-2017.aspx
lolz... paying tax on spec mining poo-coins...and who is determining fair market value of whiz-bang wankcoin? and at what point is that price assumed, day of filing? waaay to speculative unless you are mining the big 5.
@OP - mine away - if you really believe current market cap and adoption rates, you could potentially ROI in 1 month depending on the coin. These markets are so volatile, manipulated, and move so quickly, anyone who tries to use traditional market rationale to project is wasting their time.
dont buy 5k worth of GPUs and create a nicehash account. Scour BTCTalk threads and finding a virgin project with no premine and has something going for it.
@OP - mine away - if you really believe current market cap and adoption rates, you could potentially ROI in 1 month depending on the coin. These markets are so volatile, manipulated, and move so quickly, anyone who tries to use traditional market rationale to project is wasting their time.
dont buy 5k worth of GPUs and create a nicehash account. Scour BTCTalk threads and finding a virgin project with no premine and has something going for it.
Side-income is the answer. Every company ever, even the one you are making your 300 to 500 every couple days from, would love to have a return on investment of 6 months!
Also, if you are making 300 to 500 every couple days, odds are you have a college degree, how long for the return on investment for that? My college degree cost me probably around $75,000, if not more. I made $45k before tax my first year working out of college. After living expenses it would probably take 5+ years to pay that back and that's optimistic.
You are absolutely right. In fact you've never been more right. Mining is just a bad idea and I would avoid it. Especially because it makes you choose - and once you go down that dark mining path, you can never show your face at an ordinary job again.
And besides, "it's a crypto CRAZE", amirite? Don't become part of the problem.
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How the heck are you even supposed to claim capital gains on bitcoins anyway? If I pool mine qty x of bitcoins and later sell them for $100 - what was the gain? $100? No, they still cost something to create - cost of video cards, rig, electricity, etc. So am I supposed to keep track of all that on a daily basis and use that as the cost basis to calculate the gain? Daily since that's how I generate them? As my pool pays out?
Point is - typical govt./IRS BS. We'll tax that property you created - but we can't be bothered to figure out HOW, and then communicate that to you properly. It's no wonder nobody reports it - no one really knows how to...
Point is - typical govt./IRS BS. We'll tax that property you created - but we can't be bothered to figure out HOW, and then communicate that to you properly. It's no wonder nobody reports it - no one really knows how to...
atp1916
[H]ard|DCoTM x1
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By the time i cash out (in the future), bitcoin will be currency.
margrave
Weaksauce
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1. Return on investment expressed as a percentage doesn't tell the whole story ... because I cannot spend percentages. I can only spend dollars.
2. If you spend $300 on computing gear and you break even in 6 months, you've effectively spent nothing at that point.
(I'm assuming that $300 is the TOTAL cost of doing "business". If there are other costs they can be jiggered into the computation.)
Then in another 6 months you'll presumably earn another $300. If this is sustainable you'll earn $600 every year.
I don't know about you, but I wouldn't be willing to do much for a mere $600 per year.
So ... question: If I instead spent $3000 for a super rig (10x the initial rig), can I then earn $3000 every six months?
Or a super-duper $30000 rig and earn $30000 every six months?
If so, now we're talking. But for $300 every six months ... meh.
3. I'm sorry your degree cost you $75,000. I sent three daughters to a state university. Tuition for four years at that time (mid- to late-2000s) cost around $8000. Add in fees, housing, food ... and the total came to about $30,000 each.
In contrast my degree was much less expensive. Even including room and board it was about $10,000 or $12,000. But I graduated in 1976. Prices were lower back then.
I didn't have to pay back that cost because my parents and a scholarship covered it all. But I did pay my wife's student loan. She had $4500 in loans, and it was paid back at around $60 per month over six or seven years. We could have paid it more quickly, but with low-rate student loans, there's no point in accelerating the payoff, right?
Regardless, it was worth it. I earned more in one year at my first job than the $10,000+ price of the four-year degree. (And she did, too.)
But it helps that I got the right kind of education. I wouldn't recommend a liberal arts degree (unless you want to go to work serving hamburgers and fries).
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No, it's not too late, by all means put some money into crypto whether it be buying it straight up or buying hardware to mine, BUT
1. diversify, buy other things like stocks, bonds, CD's, mutual funds, international, domestic, etc...
2. due to the HIGHLY volatile nature of crypto, always assume any money you put into crypto could be worth $0 tomorrow
1. diversify, buy other things like stocks, bonds, CD's, mutual funds, international, domestic, etc...
2. due to the HIGHLY volatile nature of crypto, always assume any money you put into crypto could be worth $0 tomorrow
cybereality
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Not sure that's the right way to look at it margrave . Since you say a "mere $600 per year" let's see some other ways to make this money.
With an online savings account today, a decent rate would be 1.5% interest. Meaning you'd have to deposit $40,000 in order to get a $600 return in a year. Granted, this is a 100% safe investment, but you are also tying up $40k in assets just to make $600.
With the stock market, unless you get lucky, a 15% annual return is decent (for example, on an index fund). So you would have to risk $4,000 to potentially make $600 in a year. While it's unlikely the whole market would crash, this investment can lose value.
The point about spending more money to make more money should be obvious. If 1 video card can make $600, then 2 can make $1,200, and so on, up to as much equipment as you can handle.
With an online savings account today, a decent rate would be 1.5% interest. Meaning you'd have to deposit $40,000 in order to get a $600 return in a year. Granted, this is a 100% safe investment, but you are also tying up $40k in assets just to make $600.
With the stock market, unless you get lucky, a 15% annual return is decent (for example, on an index fund). So you would have to risk $4,000 to potentially make $600 in a year. While it's unlikely the whole market would crash, this investment can lose value.
The point about spending more money to make more money should be obvious. If 1 video card can make $600, then 2 can make $1,200, and so on, up to as much equipment as you can handle.
Excellent post, and this point here is precisely why banks are so cranky about cryptocurrency and bitcoin, to the point they've been spamming nasty letters to customers when they see transfers happening to exchanges like Coinbase. Banks have had this massive float of hundreds of billions to trillions practically for free -- which they turn around and loan out for 10x-50x what they're paying fools in "interest" for keeping their money "safe" with them.
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$40,000 is about what I invested in mining rigs last year. I started GPU mining in late September with my first rig, which consisted of 7x 1080Ti's. I was around 60 GPU's by the end of the year, and as of a few weeks ago, I'm up to 77 GPUs. All my GPU's were purchased at or below MSRP. Most new, but some used. At the peak in January, I was pulling down over $500/day. This month has been more "normal" and my daily average so far this month has been $232/day. I'm on track to make around $6,000 this month. I made $10,500 in January and $8,155 in December.
I do have a day job that makes me about $300/day plus health benefits for the whole family, doing IT / Data Warehouse type reporting for a service provider. I work from home most days, but do go into the office for important meetings and when doing presentations. I wouldn't dream of giving that up even though I anticipate earnings from mining to eclipse my regular job this year. I also have a 401K plan where I work with company matching on the first 6%, something else I would not have if my only income was from mining.
So that $40,000 investment in mining gear in the 2nd half of 2017, has given me a much better return than what I could reasonably have expected in a relatively conservative investment portfolio.
I have been funding my expansion from my earnings, but with GPU prices what they are right now, I'm just hodl'ing for the most part. Once prices come down to MRSP again, I'll continue to expand. I'm hoping that will coincide with when Volta/Ampere/Turing or whatever they end up calling the successor to Pascal, are readily available again. My practical limit for expansion will be when I reach a power consumption of around 167 kva, which is the largest transformer the POCO is willing to install for me in my rural residential single phase supplied neighborhood. 167 kva is about 150,000 Watts assuming a 0.9 power factor. That's about 750 1080Ti's running at 200 watts each. Overhead for power consumed by mobos, cpu, fans, etc is about 15%, so realistically, that then becomes 640 GPU's or so. Or about 80 rigs with 8 card each. A little under 100 rigs is probably also all that I would want to manage and maintain on my own anyway, especially given the needs to upgrade to current generation GPU's every 12-18 months or so.
I do have a day job that makes me about $300/day plus health benefits for the whole family, doing IT / Data Warehouse type reporting for a service provider. I work from home most days, but do go into the office for important meetings and when doing presentations. I wouldn't dream of giving that up even though I anticipate earnings from mining to eclipse my regular job this year. I also have a 401K plan where I work with company matching on the first 6%, something else I would not have if my only income was from mining.
So that $40,000 investment in mining gear in the 2nd half of 2017, has given me a much better return than what I could reasonably have expected in a relatively conservative investment portfolio.
I have been funding my expansion from my earnings, but with GPU prices what they are right now, I'm just hodl'ing for the most part. Once prices come down to MRSP again, I'll continue to expand. I'm hoping that will coincide with when Volta/Ampere/Turing or whatever they end up calling the successor to Pascal, are readily available again. My practical limit for expansion will be when I reach a power consumption of around 167 kva, which is the largest transformer the POCO is willing to install for me in my rural residential single phase supplied neighborhood. 167 kva is about 150,000 Watts assuming a 0.9 power factor. That's about 750 1080Ti's running at 200 watts each. Overhead for power consumed by mobos, cpu, fans, etc is about 15%, so realistically, that then becomes 640 GPU's or so. Or about 80 rigs with 8 card each. A little under 100 rigs is probably also all that I would want to manage and maintain on my own anyway, especially given the needs to upgrade to current generation GPU's every 12-18 months or so.
Derfnofred
Gawd
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- Dec 11, 2009
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- 606
I mean that's a pretty simplistic evaluation that ignores the fact that the Fed has kept interest rates so stupidly low and cheap money exists. Of course banks aren't going to give you "good" return rate, they have absolutely no incentive to do so when it'd be cheaper for them to seek loans from somewhere else (including all their regulatory overhead).
I used nowinstock.net and the forums here to pick up a couple 1080ti's. They are running Nicehash, and with today's BTC prices and my electricity prices I'm getting my money back after about 6 months. I make transfers to a hardware wallet pretty often so if Nicehash gets hacked again I won't lose anything major. I'm banking the BTC and not cashing out, so it always has the possibility of gaining value. It's a patience game for sure, and I'm just doing it as a little hobby.
Some people are getting their ROI and then being "profitable" by mining alt-coins, but many alt coins can lose major value at any time so it's risky.
Some people are getting their ROI and then being "profitable" by mining alt-coins, but many alt coins can lose major value at any time so it's risky.
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[QUOTE="
Some people are getting their ROI and then being "profitable" by mining alt-coins, but many alt coins can lose major value at any time so it's risky.[/QUOTE]
So can Bitcoin and if bitcoin stays up but alcoins drop then the payments in NH go to shit. My BTC payments have been down ~ 25 percent in the last 2 weeks on NH recently.
Some people are getting their ROI and then being "profitable" by mining alt-coins, but many alt coins can lose major value at any time so it's risky.[/QUOTE]
So can Bitcoin and if bitcoin stays up but alcoins drop then the payments in NH go to shit. My BTC payments have been down ~ 25 percent in the last 2 weeks on NH recently.
1: okay.
2: yes it scales.
3: tuition cost me probably more like 30 or 40k, but there's dorms, apartments, meal plans, feeding yourself, books, etc, etc.
And you wrote a lot of stuff, but what's your conclusion? What are you driving at?
Thanks for posting this information. I enjoyed reading your thread about getting a 40' shipping container to house your miners. It's really interesting to see the actual numbers from your mining operation. I sure would like to double my salary!
At current rates you are making estimated ~$84,000/year, historically this is the low time of the year, picks up and peaks in June and then end of year. My two Vega FE's is making $5.52, 80cards or 40x = ~$80,000 a year. This will pay off the mining rigs 2x over in 1 year and still be making money next year.
People tend to forget, if one card is profitable - making more money then it cost to run and buy over time, two cards, three cards, 1000 cards will be the same just 1000x more profits. The mining dilemma, power become the most limiting factor, then space, cooling and know how. Plus always a risk, but if you cash out as you make it, with it profitable, you win period. Some of us hold for the longer term are taking the higher risk.
cjcox
2[H]4U
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- Jun 7, 2004
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Yes, it's too late. Can we buy your GPUs?
Sincerely,
The Desperate
Sincerely,
The Desperate
ccityinstaller
Supreme [H]ardness
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- 4,236
I am making $46 a day (yes no typo) with a pair of VEGA 56s and 5 cores of my 4Ghz Ryzen 5 1600...I am stockpiling what I am mining since I think it is going to be the next Ethereum in terms of its value exploding. No, I will not tell you what it is since I am greedy 
...
...Define "usable life", the GPU may be usable for 7 years before it gives up the ghost. But if you are projecting to not recoup your investment in 7 years, you probably shouldn't go forward with purchasing the card.
Archaea
[H]F Junkie
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I am making $46 a day (yes no typo) with a pair of VEGA 56s and 5 cores of my 4Ghz Ryzen 5 1600...I am stockpiling what I am mining since I think it is going to be the next Ethereum in terms of its value exploding. No, I will not tell you what it is since I am greedy
I am making $46 a day (yes no typo) with a pair of VEGA 56s and 5 cores of my 4Ghz Ryzen 5 1600...I am stockpiling what I am mining since I think it is going to be the next Ethereum in terms of its value exploding. No, I will not tell you what it is since I am greedy
ccityinstaller
Supreme [H]ardness
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Lol,I was just being a smart ass although the numbers are correct. Unless you are running AMD cards though the coin is not for you.
I am making $46 a day (yes no typo) with a pair of VEGA 56s and 5 cores of my 4Ghz Ryzen 5 1600...I am stockpiling what I am mining since I think it is going to be the next Ethereum in terms of its value exploding. No, I will not tell you what it is since I am greedy
maybe you should probably take the peer to peer offers before you pay the iron price.
Usable life = average 3-4 year span before these become largely unusable. If I was limping by with a June 2015 980ti right now I'd want the next generation card in order to play the next battlefield game. You'd have to believe 1080ti's will be relevant into 2020 and "paid off" by then if mining 24/7.
I used a series of 0% credit card offers to build what I have and most had full ROI in under 3 months which I used to buy more stuff. I'm sitting here with a full 100% ROI with zero reasonably priced GPUs available to buy and about as many burst drives as I feel comfortable with having right this second.TBH I still think if you have the available cash for a 4+ GPU rig that you might just be better off BUYING cryptocurrencies. I won't deny that helping my coworker build his rigs up was pretty exciting though
I am making $46 a day (yes no typo) with a pair of VEGA 56s and 5 cores of my 4Ghz Ryzen 5 1600...I am stockpiling what I am mining since I think it is going to be the next Ethereum in terms of its value exploding. No, I will not tell you what it is since I am greedy
The price would go up higher if you gave it more publicity.
Keeping it a secret is dumb, and makes no sense.
Nothing out there is giving 3 month ROI's anymore. Vega56 would take you almost a year at current prices.
well it clearly tells you its cryptonight. https://www.cryptunit.com/ my guess is if they checked at just the right second yes it was $46 a day but in reality anything emerging has insane fluctuation in profits as the diff swings massively on the various coins based on random prices.
He'll find out the hard way
ccityinstaller
Supreme [H]ardness
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What exactly will I find out the hard way? I am in 30 different coins for the long haul. 29 of them can go nowhere, but if just 1 takes off in the next 3-5 years then I will be set.