October 24, 2013: 553Gh/s gets 1 BTC/day @ a cost of $12,366 (9.25 BFL singles from ebay) ($22.36/Gh/s)
October 26, 2013: 778Gh/s gets 1 BTC/day @ a cost of $16,900 (13 BFL singles from ebay) ($21.72/Gh/s)
November 05 2013: 1016Gh/s gets 1 BTC/day @ a cost of $22,013 (17 BFL singles from ebay) ($21.66/Gh/s)
November 17, 2013: 1212Gh/s gets 1 BTC/day @ a cost of $42,420 (20.2 BFL singles from ebay) ($35/Gh/s)
November 30, 2013: 1420Gh/s gets 1 BTC/day @ a cost of $82,833 (24 BFL singles from ebay) ($58/Gh/s)
December 11,2013: 1800Gh/s gets 1 BTC/Day @ a cost of $75,000 (30 BFL singles from ebay) ($41/Gh/s)
December 21, 2013: 2350Gh/s gets 1 BTC/Day @ a cost of $86166 (39 BFL singles from ebay) ($36/Gh/s)
Today:
January 08, 2014: 2821Gh/s gets 1 BTC/Day@ a cost of $58500 (78 AsicMiner Cubes from ebay) ($21/Gh/s)
The tumble in asic miner unit prices over the last few weeks has made it much cheaper to get bitcoins. Since the are now several dozen cubes available I have moved over to them for the calculations, and they are fairly cheap compared to BFL units offered. Unfortunately, to run these miners you need some power supplies. In this case, add an additional 39 power supplies (corsair TX850) at a cost of $4875 and that gets you up to right at $63,000 to arm up for one BTC per day with the ASICminer cubes. That's pretty close to what you would need to spend on little singles from BFL, so it's really a wash. If the antminers become more widely available I may consider using them for pricing the next round as they are slightly cheaper currently per Gh/s. It BTC can climb back over $1000 and sustain it for a while, we could see the unit prices increase as they did before, so keep your seatbelt on, it's one big wild ride!
Topic: $12366, first data point. (Read 6466 times)
With bitcoin sub $650 today, no. You would have been better off buying the miners, mining for a month, selling the miners on ebay, and then buying coins. All timed perfectly with their respective markets, of course.
If you had put the 12000 into bitcoin in October, you'd probably be much better off than putting it into mining hardware, no?
October 24, 2013: 553Gh/s gets 1 BTC/day @ a cost of $12,366 (9.25 BFL singles from ebay) ($22.36/Gh/s)
October 26, 2013: 778Gh/s gets 1 BTC/day @ a cost of $16,900 (13 BFL singles from ebay) ($21.72/Gh/s)
November 05 2013: 1016Gh/s gets 1 BTC/day @ a cost of $22,013 (17 BFL singles from ebay) ($21.66/Gh/s)
November 17, 2013: 1212Gh/s gets 1 BTC/day @ a cost of $42,420 (20.2 BFL singles from ebay) ($35/Gh/s)
November 30, 2013: 1420Gh/s gets 1 BTC/day @ a cost of $82,833 (24 BFL singles from ebay) ($58/Gh/s)
December 11,2013: 1800Gh/s gets 1 BTC/Day @ a cost of $75,000 (30 BFL singles from ebay) ($41/Gh/s)
Merry Christmas! Today:
December 21, 2013: 2350Gh/s gets 1 BTC/Day @ a cost of $86166 (39 BFL singles from ebay) ($36/Gh/s)
Difficulty going up, prices for ASIC units going down. Eventually someone will have to get something to the secondary market for immediate delivery so we can stop using BFL singles as the benchmark. There are not even 39 BFL units combined available for sale on ebay. In another month or so there may not be enough hashing power for immediate delivery on ebay to even do one coin per day at any price.
October 26, 2013: 778Gh/s gets 1 BTC/day @ a cost of $16,900 (13 BFL singles from ebay) ($21.72/Gh/s)
November 05 2013: 1016Gh/s gets 1 BTC/day @ a cost of $22,013 (17 BFL singles from ebay) ($21.66/Gh/s)
November 17, 2013: 1212Gh/s gets 1 BTC/day @ a cost of $42,420 (20.2 BFL singles from ebay) ($35/Gh/s)
November 30, 2013: 1420Gh/s gets 1 BTC/day @ a cost of $82,833 (24 BFL singles from ebay) ($58/Gh/s)
December 11,2013: 1800Gh/s gets 1 BTC/Day @ a cost of $75,000 (30 BFL singles from ebay) ($41/Gh/s)
Merry Christmas! Today:
December 21, 2013: 2350Gh/s gets 1 BTC/Day @ a cost of $86166 (39 BFL singles from ebay) ($36/Gh/s)
Difficulty going up, prices for ASIC units going down. Eventually someone will have to get something to the secondary market for immediate delivery so we can stop using BFL singles as the benchmark. There are not even 39 BFL units combined available for sale on ebay. In another month or so there may not be enough hashing power for immediate delivery on ebay to even do one coin per day at any price.
October 24, 2013: 553Gh/s gets 1 BTC/day @ a cost of $12,366 (9.25 BFL singles from ebay) ($22.36/Gh/s)
October 26, 2013: 778Gh/s gets 1 BTC/day @ a cost of $16,900 (13 BFL singles from ebay) ($21.72/Gh/s)
November 05 2013: 1016Gh/s gets 1 BTC/day @ a cost of $22,013 (17 BFL singles from ebay) ($21.66/Gh/s)
November 17, 2013: 1212Gh/s gets 1 BTC/day @ a cost of $42,420 (20.2 BFL singles from ebay) ($35/Gh/s)
November 30, 2013: 1420Gh/s gets 1 BTC/day @ a cost of $82,833 (24 BFL singles from ebay) ($58/Gh/s)
And now, today:
December 11,2013: 1800Gh/s gets 1 BTC/Day @ a cost of $75,000 (30 BFL singles from ebay) ($41/Gh/s)
Even with the difficulty jump, the cost to mine a coin per day has dropped nicely. This should be correctly analysed as an example where the value of a bitcoin directly impacted the value of ASIC units. High prices of btc drove up the price of available units, and the "crash" in btc value drove it back down. This can stand as an example where the price of BTC directly affected the cost to mine them, both upward and downward.
You could have bought a unit on November 5th, mined on it for a month, and then sold it for twice what you paid for it. You can probably buy it back for the original cost in another week.
I expect that once the availability of ASIC miners becomes more ubiquitous, we will eventually see the tail wagging the dog. Time will tell.
October 26, 2013: 778Gh/s gets 1 BTC/day @ a cost of $16,900 (13 BFL singles from ebay) ($21.72/Gh/s)
November 05 2013: 1016Gh/s gets 1 BTC/day @ a cost of $22,013 (17 BFL singles from ebay) ($21.66/Gh/s)
November 17, 2013: 1212Gh/s gets 1 BTC/day @ a cost of $42,420 (20.2 BFL singles from ebay) ($35/Gh/s)
November 30, 2013: 1420Gh/s gets 1 BTC/day @ a cost of $82,833 (24 BFL singles from ebay) ($58/Gh/s)
And now, today:
December 11,2013: 1800Gh/s gets 1 BTC/Day @ a cost of $75,000 (30 BFL singles from ebay) ($41/Gh/s)
Even with the difficulty jump, the cost to mine a coin per day has dropped nicely. This should be correctly analysed as an example where the value of a bitcoin directly impacted the value of ASIC units. High prices of btc drove up the price of available units, and the "crash" in btc value drove it back down. This can stand as an example where the price of BTC directly affected the cost to mine them, both upward and downward.
You could have bought a unit on November 5th, mined on it for a month, and then sold it for twice what you paid for it. You can probably buy it back for the original cost in another week.
I expect that once the availability of ASIC miners becomes more ubiquitous, we will eventually see the tail wagging the dog. Time will tell.
Its getting more and more expensive for those who want to mine 1 BTC everyday for 10 days.
BTC has a cap of 21 billion coins iirc, half have already been mined.
IMO, BTC is worthless until you can convert it to whatever the standard currency is. Same with gold, it's useless until you convert it to a currency you can use, other wise it's just a shiny rock.
IMO, BTC is worthless until you can convert it to whatever the standard currency is. Same with gold, it's useless until you convert it to a currency you can use, other wise it's just a shiny rock.
There is a fixed amount of gold as well. The easy stuff gets mined first, with just a pan.
Sigh. You are clearly trapped in your flawed analogy. There are some parallels, but the mechanisms are fundamentally different. The revenue of my mining pan (in gold ounces per day) doesnt get affected in any way when someone opens a new gigantic mine in South Africa or starts mining asteroids. The dollar revenue of my pan might change, perhaps even quite dramatically if they ever manage to mine millions of tons of gold floating in space or near the earth core, but not the amount of gold I can mine.
This is completely different with bitcoin where my btc revenue is 100% dependent on what the rest of the network does, and bitcoin value is almost completely independent of that.
but if we would keep the rate of BTC/day constant with hashrate than in no time at all we would get quaddrillions of bitcoin.
It matters when a bunch of Chinese claim jumpers mine every ounce from your field. Your coins got mined by someone else. If you mine them before some else does, you get them. The similarities are striking. The only difference is that there is not a legal structure in bitcoins to determine who has the right to mine a particular block.
There is a fixed amount of gold as well. The easy stuff gets mined first, with just a pan.
Sigh. You are clearly trapped in your flawed analogy. There are some parallels, but the mechanisms are fundamentally different. The revenue of my mining pan (in gold ounces per day) doesnt get affected in any way when someone opens a new gigantic mine in South Africa or starts mining asteroids. The dollar revenue of my pan might change, perhaps even quite dramatically if they ever manage to mine millions of tons of gold floating in space or near the earth core, but not the amount of gold I can mine.
This is completely different with bitcoin where my btc revenue is 100% dependent on what the rest of the network does, and bitcoin value is almost completely independent of that.
There is a fixed amount of gold as well. The easy stuff gets mined first, with just a pan. Now you have to grind up thousands of tons of low-grade ore with millions and millions invested in gear. I would say the difficulty level for getting gold has increased substantially. Guys with pans are like CPU mining. A waste of time, energy, and effort. Every ounce of gold extracted means the next one will be harder to mine, and be more expensive and/or more dangerous to obtain.
Like I said, miners are not in the business of hoarding. They are in the business of obtaining a commodity and bringing it to market at a profit. That is their only measure of success.
Additionally, you could effectively mine every future coin tomorrow with a sufficiently large asic farm. Solve 10,000 blocks per second and see if you can't mine the last coin before the diff increases. Unrealistic, of course. But mathematically possible.
Like I said, miners are not in the business of hoarding. They are in the business of obtaining a commodity and bringing it to market at a profit. That is their only measure of success.
Additionally, you could effectively mine every future coin tomorrow with a sufficiently large asic farm. Solve 10,000 blocks per second and see if you can't mine the last coin before the diff increases. Unrealistic, of course. But mathematically possible.
Whats the gold analogy for difficulty? There is none. And thats why the analogy breaks down completely. If you send an army of slaves to scour your land and in to your mines, they will mine more gold per day. And if you mine a lot more gold, price will drop. But you can invest $10B in mining hardware and your equipment will still only mine ~150 BTC per hour, if it werent for the reward halving, exactly the same as what Satoshi was mining alone on his $1000 laptop.
The result is that bitcoin price is not dependent on mining cost, since production is fixed through difficulty. The opposite is true, mining cost and mining equipment, especially since there is a huge shortage, is currently priced solely in relation to expected revenue, which is function of (expected) difficulty and bitcoin's price. There is no opposite mechanism.
The result is that bitcoin price is not dependent on mining cost, since production is fixed through difficulty. The opposite is true, mining cost and mining equipment, especially since there is a huge shortage, is currently priced solely in relation to expected revenue, which is function of (expected) difficulty and bitcoin's price. There is no opposite mechanism.
I am obviously doing a poor job of communicating a simple concept.
Imagine gold mining. You buy shovels with dollars. You lease land with dollars. You pay wages in dollars. You have costs that are all calculated in dollars.
Gold is a commodity. No company on earth asks how many ounces of gold it needs to spend to extract ounces of gold. They are converting dollars to gold, and then back again into dollars.
A gold mining company must understand the dollar cost to produce an ounce of gold. If they are either unable or unwilling to do so they will likely fail. This is basic. One must know the cost to produce a bitcoin before even considering investing in mining one. That information is being provided here.
A miner is not in the business of mining gold and hoarding it. They are in the business of extracting a commodity and selling it at a profit.
Imagine gold mining. You buy shovels with dollars. You lease land with dollars. You pay wages in dollars. You have costs that are all calculated in dollars.
Gold is a commodity. No company on earth asks how many ounces of gold it needs to spend to extract ounces of gold. They are converting dollars to gold, and then back again into dollars.
A gold mining company must understand the dollar cost to produce an ounce of gold. If they are either unable or unwilling to do so they will likely fail. This is basic. One must know the cost to produce a bitcoin before even considering investing in mining one. That information is being provided here.
A miner is not in the business of mining gold and hoarding it. They are in the business of extracting a commodity and selling it at a profit.
Currencies have a value peg when you spend them. You can't cry that you sold your 69 GTO 25 years ago for $1000. At the time, it was the going rate. You cannot ignore the temporal nature of the universe to prove a point. If you bought a BFL unit you can today practically double the stack of your dollars by reselling it. That is by no means a bad deal. Perhaps you would have been happier buying shares of Facebook, Pizza, Hookers and Blow, or just letting it sit in BTC. But that really is not the point.
You really dont get it. A miner produces BTC, not dollar. So of course you have to calculate the profit in BTC. If you calculate it in dollar, the outcome is 100% dependent on future BTC exchange rate, exactly like when buying BTC. Buying mining gear is exactly like buying BTC spread over time.
Of course Im not surprised you dont get this. You dont seem to understand the basic concepts behind mining otherwise you wouldnt be calculating silly things like mining cost per BTC and thinking it somehow impacts btc exchange rate.
You are lucky to lock in a BFL 60Gh/s unit on ebay for under $3500. And they said there would never be ROI on these....LOL!
So they are charging about 3 BTC for them. You realize most people paid 25 - 100 BTC for one, right?
Apples and Oranges. They could have paid either with dollars or BTC, it did not really matter because at that point in time they had a specific conversion rate. That is like a Silk Road guy bitching because he ended up paying $50,000 for a nickle bag last year if you figure in today's rate. Or buying 5000 acres of Florida property for 10 cents per acre a century ago.
Currencies have a value peg when you spend them. You can't cry that you sold your 69 GTO 25 years ago for $1000. At the time, it was the going rate. You cannot ignore the temporal nature of the universe to prove a point. If you bought a BFL unit you can today practically double the stack of your dollars by reselling it. That is by no means a bad deal. Perhaps you would have been happier buying shares of Facebook, Pizza, Hookers and Blow, or just letting it sit in BTC. But that really is not the point.
Im not really sure what your point is? The cost of a miner MUST be denominated in BTC (cost = X).
This miner will mine Y amount of BTC in its life. If Y isnt higher than X, the machine will never ROI. Its pretty simple.
I sold my BFL 60 gh/s miners for $1600 each on ebay back in Oct and bought BTC with the money. At roughly $200/BTC, I got 8 BTC per unit.
It wasnt possible for them to mine 8 BTC over their lifespan, so this was an easy decision (sell to people who dont understand 3rd grade math).
You are lucky to lock in a BFL 60Gh/s unit on ebay for under $3500. And they said there would never be ROI on these....LOL!
So they are charging about 3 BTC for them. You realize most people paid 25 - 100 BTC for one, right?
Apples and Oranges. They could have paid either with dollars or BTC, it did not really matter because at that point in time they had a specific conversion rate. That is like a Silk Road guy bitching because he ended up paying $50,000 for a nickle bag last year if you figure in today's rate. Or buying 5000 acres of Florida property for 10 cents per acre a century ago.
Currencies have a value peg when you spend them. You can't cry that you sold your 69 GTO 25 years ago for $1000. At the time, it was the going rate. You cannot ignore the temporal nature of the universe to prove a point. If you bought a BFL unit you can today practically double the stack of your dollars by reselling it. That is by no means a bad deal. Perhaps you would have been happier buying shares of Facebook, Pizza, Hookers and Blow, or just letting it sit in BTC. But that really is not the point.
You are lucky to lock in a BFL 60Gh/s unit on ebay for under $3500. And they said there would never be ROI on these....LOL!
So they are charging about 3 BTC for them. You realize most people paid 25 - 100 BTC for one, right?
Welcome to December, 2013!
October 24, 2013: 553Gh/s gets 1 BTC/day @ a cost of $12366 (9.25 BFL singles from ebay) ($22.36/Gh/s)
October 26, 2013: 778Gh/s gets 1 BTC/day @ a cost of $16900 (13 BFL singles from ebay) ($21.72/Gh/s)
November 05 2013: 1016Gh/s gets 1 BTC/day @ a cost of $22013 (17 BFL singles from ebay) ($21.66/Gh/s)
November 17, 2013: 1212Gh/s gets 1 BTC/day @ a cost of $42,420 (20.2 BFL singles from ebay) ($35/Gh/s)
And now, today:
November 30, 2013: 1420Gh/s gets 1 BTC/day @ a cost of $82,833 (24 BFL singles from ebay) ($58/Gh/s)
Now, I grant you that the prices of ASIC units has gone loopy. Everything everywhere is priced through the ceiling because hardly anyone has units in stock and with btc breaking ATH day after day, more folks want to get involved... way more folks than there are ASIC's for. I guess we should have seen this coming. Instead of the glut of ASIC's predicted by most, it appears the reverse came to fruition first. You are lucky to lock in a BFL 60Gh/s unit on ebay for under $3500. And they said there would never be ROI on these....LOL!
October 24, 2013: 553Gh/s gets 1 BTC/day @ a cost of $12366 (9.25 BFL singles from ebay) ($22.36/Gh/s)
October 26, 2013: 778Gh/s gets 1 BTC/day @ a cost of $16900 (13 BFL singles from ebay) ($21.72/Gh/s)
November 05 2013: 1016Gh/s gets 1 BTC/day @ a cost of $22013 (17 BFL singles from ebay) ($21.66/Gh/s)
November 17, 2013: 1212Gh/s gets 1 BTC/day @ a cost of $42,420 (20.2 BFL singles from ebay) ($35/Gh/s)
And now, today:
November 30, 2013: 1420Gh/s gets 1 BTC/day @ a cost of $82,833 (24 BFL singles from ebay) ($58/Gh/s)
Now, I grant you that the prices of ASIC units has gone loopy. Everything everywhere is priced through the ceiling because hardly anyone has units in stock and with btc breaking ATH day after day, more folks want to get involved... way more folks than there are ASIC's for. I guess we should have seen this coming. Instead of the glut of ASIC's predicted by most, it appears the reverse came to fruition first. You are lucky to lock in a BFL 60Gh/s unit on ebay for under $3500. And they said there would never be ROI on these....LOL!
October 24, 2013: 553Gh/s gets 1 BTC/day @ a cost of $12366 (9.25 BFL singles from ebay) ($22.36/Gh/s)
October 26, 2013: 778Gh/s gets 1 BTC/day @ a cost of $16900 (13 BFL singles from ebay) ($21.72/Gh/s)
November 05 2013: 1016Gh/s gets 1 BTC/day @ a cost of $22013 (17 BFL singles from ebay) ($21.66/Gh/s)
November 17, 2013: 1212Gh/s gets 1 BTC/day @ a cost of $42,420 (20.2 BFL singles from ebay) ($35/Gh/s)
The prices of ASIC units for immediate delivery has increased dramatically over the last few weeks with bidding wars erupting over available units. There is a massive shortage of ASIC miners in relation to the demand due to slow production, and increased demand due to the rapidly increasing value of BTC.
I was hoping to substitute the ASICMiner cube this week for the 60Gh/s BFL units, but they immediately sold out and are not available even on the secondary markets such as Ebay in any quantity. I must say it was unexpected that the price per gh/s increased. It appears that this trend will continue until some company can provide higher hashing units at a lower cost. Many are promising to do so, but none have any available for immediate delivery at this time.
The cost to mine 1btc/day has quadrupled in less than one month. If this trend continues it will be over $100,000 before Christmas.
October 26, 2013: 778Gh/s gets 1 BTC/day @ a cost of $16900 (13 BFL singles from ebay) ($21.72/Gh/s)
November 05 2013: 1016Gh/s gets 1 BTC/day @ a cost of $22013 (17 BFL singles from ebay) ($21.66/Gh/s)
November 17, 2013: 1212Gh/s gets 1 BTC/day @ a cost of $42,420 (20.2 BFL singles from ebay) ($35/Gh/s)
The prices of ASIC units for immediate delivery has increased dramatically over the last few weeks with bidding wars erupting over available units. There is a massive shortage of ASIC miners in relation to the demand due to slow production, and increased demand due to the rapidly increasing value of BTC.
I was hoping to substitute the ASICMiner cube this week for the 60Gh/s BFL units, but they immediately sold out and are not available even on the secondary markets such as Ebay in any quantity. I must say it was unexpected that the price per gh/s increased. It appears that this trend will continue until some company can provide higher hashing units at a lower cost. Many are promising to do so, but none have any available for immediate delivery at this time.
The cost to mine 1btc/day has quadrupled in less than one month. If this trend continues it will be over $100,000 before Christmas.
Well, since the price has increased so much its more profitable to sell then use it to mine right?
Yes, but the price for 1 Bitcoin might be +$10,000 by Christmas at this rate! 
I'd take that as my gift this year! 
October 24, 2013: 553Gh/s gets 1 BTC/day @ a cost of $12366 (9.25 BFL singles from ebay) ($22.36/Gh/s)
October 26, 2013: 778Gh/s gets 1 BTC/day @ a cost of $16900 (13 BFL singles from ebay) ($21.72/Gh/s)
November 05 2013: 1016Gh/s gets 1 BTC/day @ a cost of $22013 (17 BFL singles from ebay) ($21.66/Gh/s)
November 17, 2013: 1212Gh/s gets 1 BTC/day @ a cost of $42,420 (20.2 BFL singles from ebay) ($35/Gh/s)
The prices of ASIC units for immediate delivery has increased dramatically over the last few weeks with bidding wars erupting over available units. There is a massive shortage of ASIC miners in relation to the demand due to slow production, and increased demand due to the rapidly increasing value of BTC.
I was hoping to substitute the ASICMiner cube this week for the 60Gh/s BFL units, but they immediately sold out and are not available even on the secondary markets such as Ebay in any quantity. I must say it was unexpected that the price per gh/s increased. It appears that this trend will continue until some company can provide higher hashing units at a lower cost. Many are promising to do so, but none have any available for immediate delivery at this time.
The cost to mine 1btc/day has quadrupled in less than one month. If this trend continues it will be over $100,000 before Christmas.
October 26, 2013: 778Gh/s gets 1 BTC/day @ a cost of $16900 (13 BFL singles from ebay) ($21.72/Gh/s)
November 05 2013: 1016Gh/s gets 1 BTC/day @ a cost of $22013 (17 BFL singles from ebay) ($21.66/Gh/s)
November 17, 2013: 1212Gh/s gets 1 BTC/day @ a cost of $42,420 (20.2 BFL singles from ebay) ($35/Gh/s)
The prices of ASIC units for immediate delivery has increased dramatically over the last few weeks with bidding wars erupting over available units. There is a massive shortage of ASIC miners in relation to the demand due to slow production, and increased demand due to the rapidly increasing value of BTC.
I was hoping to substitute the ASICMiner cube this week for the 60Gh/s BFL units, but they immediately sold out and are not available even on the secondary markets such as Ebay in any quantity. I must say it was unexpected that the price per gh/s increased. It appears that this trend will continue until some company can provide higher hashing units at a lower cost. Many are promising to do so, but none have any available for immediate delivery at this time.
The cost to mine 1btc/day has quadrupled in less than one month. If this trend continues it will be over $100,000 before Christmas.
Yes, but the price for 1 Bitcoin might be +$10,000 by Christmas at this rate!
October 24, 2013: 553Gh/s gets 1 BTC/day @ a cost of $12366 (9.25 BFL singles from ebay) ($22.36/Gh/s)
October 26, 2013: 778Gh/s gets 1 BTC/day @ a cost of $16900 (13 BFL singles from ebay) ($21.72/Gh/s)
November 05 2013: 1016Gh/s gets 1 BTC/day @ a cost of $22013 (17 BFL singles from ebay) ($21.66/Gh/s)
November 17, 2013: 1212Gh/s gets 1 BTC/day @ a cost of $42,420 (20.2 BFL singles from ebay) ($35/Gh/s)
The prices of ASIC units for immediate delivery has increased dramatically over the last few weeks with bidding wars erupting over available units. There is a massive shortage of ASIC miners in relation to the demand due to slow production, and increased demand due to the rapidly increasing value of BTC.
I was hoping to substitute the ASICMiner cube this week for the 60Gh/s BFL units, but they immediately sold out and are not available even on the secondary markets such as Ebay in any quantity. I must say it was unexpected that the price per gh/s increased. It appears that this trend will continue until some company can provide higher hashing units at a lower cost. Many are promising to do so, but none have any available for immediate delivery at this time.
The cost to mine 1btc/day has quadrupled in less than one month. If this trend continues it will be over $100,000 before Christmas.
October 26, 2013: 778Gh/s gets 1 BTC/day @ a cost of $16900 (13 BFL singles from ebay) ($21.72/Gh/s)
November 05 2013: 1016Gh/s gets 1 BTC/day @ a cost of $22013 (17 BFL singles from ebay) ($21.66/Gh/s)
November 17, 2013: 1212Gh/s gets 1 BTC/day @ a cost of $42,420 (20.2 BFL singles from ebay) ($35/Gh/s)
The prices of ASIC units for immediate delivery has increased dramatically over the last few weeks with bidding wars erupting over available units. There is a massive shortage of ASIC miners in relation to the demand due to slow production, and increased demand due to the rapidly increasing value of BTC.
I was hoping to substitute the ASICMiner cube this week for the 60Gh/s BFL units, but they immediately sold out and are not available even on the secondary markets such as Ebay in any quantity. I must say it was unexpected that the price per gh/s increased. It appears that this trend will continue until some company can provide higher hashing units at a lower cost. Many are promising to do so, but none have any available for immediate delivery at this time.
The cost to mine 1btc/day has quadrupled in less than one month. If this trend continues it will be over $100,000 before Christmas.
I do agree that purchasing mining equipment is a way of structuring a purchase of bitcoins, what makes it different is that the total number of bitcoins returned is only a poor estimate due to the inability to accurately predict difficulty increases... one could say it is a bet as to the time difficulty increases will plateau.
That said, I personally believe that there is a component of bitcoin price directly tied to the cost of mining additional coins. There have been quite a number of voices expressing the opinion that they are unrelated. The problem in my opinion was that there was no useful metric. Cost per Gh/s is meaningless as the global hash increases. Fluctuations in the value of BTC make cost analysis almost useless. For that reason I selected a metric that does not ever change as a baseline. 1 bitcoin/day was that metric to which I measure everything else. The change over time of the cost to mine 1 bitcoin per day does not rely on good estimates of future difficulty rates, does not depend on future btc values, and measures today at this moment what is required. No one can with any accuracy project what a particular device will obtain over it's useful lifetime in dollars because no one really knows future difficulty or conversion rates. But they can with reasonable certainty calculate what it costs in dollars today to buy the gear to get 1 btc/day. And that amount is nearly twice what it was two weeks ago.
That tells me that whatever component of btc price is related to mining costs has nearly doubled in two weeks. Comparing this over time with btc prices should allow me to get a rough estimate of what part of the price is related to mining costs. It is really not so complicated.
That said, I personally believe that there is a component of bitcoin price directly tied to the cost of mining additional coins. There have been quite a number of voices expressing the opinion that they are unrelated. The problem in my opinion was that there was no useful metric. Cost per Gh/s is meaningless as the global hash increases. Fluctuations in the value of BTC make cost analysis almost useless. For that reason I selected a metric that does not ever change as a baseline. 1 bitcoin/day was that metric to which I measure everything else. The change over time of the cost to mine 1 bitcoin per day does not rely on good estimates of future difficulty rates, does not depend on future btc values, and measures today at this moment what is required. No one can with any accuracy project what a particular device will obtain over it's useful lifetime in dollars because no one really knows future difficulty or conversion rates. But they can with reasonable certainty calculate what it costs in dollars today to buy the gear to get 1 btc/day. And that amount is nearly twice what it was two weeks ago.
That tells me that whatever component of btc price is related to mining costs has nearly doubled in two weeks. Comparing this over time with btc prices should allow me to get a rough estimate of what part of the price is related to mining costs. It is really not so complicated.
It will prove the correlation between the cost of minting new bitcoins and the value of a bitcoin. Or disprove it. When it costs a million dollars to buy the gear to mint one bitcoin per day we will have our answer.
But you are not measuring what you claim that you are measuring. The "cost of mining bitcoins" != hardware prices per GH, and especially not ones sold to end users.
Those are market prices formed by supply and demand, and demand is correlated with bitcoins price and expected future difficulty. Is that really so hard to grasp?
Here is a hint for you: those hardware vendors are making a fortune. You speak of "cost", what do you think it costs KnC to produce a GH? What would it cost Bitfury? Or why is that less relevant than what it costs you?
Secondly you can measure any correlation you want, but you are drawing the wrong conclusions from it (and from incorrect data) because you are (deliberately?) oblivious to the underlying mechanisms, which really arent very difficult to understand.
Plus:
Buying mining hardward (ASIC) is simply a structured purchase of bitcoins (time to delivery varies) with an variable revenue stream of bitcoins (based on future network difficulty). It can be most easily compared with buying a fixed number of bitcoins from an exchange. Just as historical prices are adjusted for inflation, mining performance needs to be adjusted for appreciation in the price of BTC. One could present all prices and revenue in BTC to avoid having to make this adjustment. Reducing a combination of variables (difficulty, hardware price, btc price, delivery date) to a single value will not result in a good indicator.
It will prove the correlation between the cost of minting new bitcoins and the value of a bitcoin. Or disprove it. When it costs a million dollars to buy the gear to mint one bitcoin per day we will have our answer.
But you are not measuring what you claim that you are measuring. The "cost of mining bitcoins" != hardware prices per GH, and especially not ones sold to end users.
Those are market prices formed by supply and demand, and demand is correlated with bitcoins price and expected future difficulty. Is that really so hard to grasp?
Here is a hint for you: those hardware vendors are making a fortune. You speak of "cost", what do you think it costs KnC to produce a GH? What would it cost Bitfury? Or why is that less relevant than what it costs you?
Secondly you can measure any correlation you want, but you are drawing the wrong conclusions from it (and from incorrect data) because you are (deliberately?) oblivious to the underlying mechanisms, which really arent very difficult to understand.
It will prove the correlation between the cost of minting new bitcoins and the value of a bitcoin. Or disprove it. When it costs a million dollars to buy the gear to mint one bitcoin per day we will have our answer.
You are not tracking the cost of mining 1 BTC. You are looking at the purchase price per GH. How many bitcoins that purchase will actually mine is utterly dependent on the network growth, which is (insufficiently) priced in the selling price, and which you are completely ignoring. So you are ignoring by far the most important mining variable today, and pretend it will be no different in 12 months when hashrate stagnates, as today when mining revenue is more than halved every month.
You are also ignoring what will become the single most important mining variable in a few months: electricity cost. Once network growth begins to stagnate (or keeps pace only with BTC pricev) you can write off your hardware purchase over 10 years if you want to, completely throwing your only metric out of the window, but you still have to pay the electricity bill every month. And it wont be long before the cost of mining (actual cost, ie, electricity cost + hardware write off) will roughly equal the mining revenue. As long as its more than marginally profitable to mine, more people will want to do it, and thus difficulty will go up. Its really that simple.
On top of that, a few things are special about todays situation:
- exponential network growth making estimating mining revenue almost impossible
- due to that growth, extremely short hardware write off period
- inability of suppliers to meet market demand, ie, ridiculous high hardware prices and almost irrelevant electricity costs.
None of these factors will remain.
Whatever it is you think you are measuring or trying to predict, without taking any of the above in to account, it has zero meaning.
You are also ignoring what will become the single most important mining variable in a few months: electricity cost. Once network growth begins to stagnate (or keeps pace only with BTC pricev) you can write off your hardware purchase over 10 years if you want to, completely throwing your only metric out of the window, but you still have to pay the electricity bill every month. And it wont be long before the cost of mining (actual cost, ie, electricity cost + hardware write off) will roughly equal the mining revenue. As long as its more than marginally profitable to mine, more people will want to do it, and thus difficulty will go up. Its really that simple.
On top of that, a few things are special about todays situation:
- exponential network growth making estimating mining revenue almost impossible
- due to that growth, extremely short hardware write off period
- inability of suppliers to meet market demand, ie, ridiculous high hardware prices and almost irrelevant electricity costs.
None of these factors will remain.
Whatever it is you think you are measuring or trying to predict, without taking any of the above in to account, it has zero meaning.
Because I am measuring the price of asic miners in dollars instead of btc. At over $300 per coin the blades are now more expensive than the bfl singles when measuring hash/dollar. Ebay was chosen for price points because it is liquid and responsive.
I am tracking dollar cost to mine 1 coin per day. Not bitcoin cost to mine 1 coin per day.
I am tracking dollar cost to mine 1 coin per day. Not bitcoin cost to mine 1 coin per day.
October 24, 2013: 553Gh/s gets 1 BTC/day @ a cost of $12366 (9.25 BFL singles from ebay) ($22.36/Gh/s)
October 26, 2013: 778Gh/s gets 1 BTC/day @ a cost of $16900 (13 BFL singles from ebay) ($21.72/Gh/s)
November 05 2013: 1016Gh/s gets 1 BTC/day @ a cost of $22013 (17 BFL singles from ebay) ($21.66/Gh/s)
It was much cheaper in dollar terms just 2 weeks ago to get a bitcoin per day. Not quite half the price, but I do see a trend developing.
This trend will likely break once some supply of more cost-efficient asic's becomes available for immediate delivery in bulk, possibly the AM cube on the 14th.
October 26, 2013: 778Gh/s gets 1 BTC/day @ a cost of $16900 (13 BFL singles from ebay) ($21.72/Gh/s)
November 05 2013: 1016Gh/s gets 1 BTC/day @ a cost of $22013 (17 BFL singles from ebay) ($21.66/Gh/s)
It was much cheaper in dollar terms just 2 weeks ago to get a bitcoin per day. Not quite half the price, but I do see a trend developing.
This trend will likely break once some supply of more cost-efficient asic's becomes available for immediate delivery in bulk, possibly the AM cube on the 14th.
why are you sticking to BFL singles from ebay? Asicminer blades are consistently cheaper and you can get them in same timeframe (2-3 days tops, if you are US resident). AM blade has price of $19.3/GH/s (0.8BTC per blade, $259 per BTC, 10.75GH/s)
October 24, 2013: 553Gh/s gets 1 BTC/day @ a cost of $12366 (9.25 BFL singles from ebay) ($22.36/Gh/s)
October 26, 2013: 778Gh/s gets 1 BTC/day @ a cost of $16900 (13 BFL singles from ebay) ($21.72/Gh/s)
November 05 2013: 1016Gh/s gets 1 BTC/day @ a cost of $22013 (17 BFL singles from ebay) ($21.66/Gh/s)
It was much cheaper in dollar terms just 2 weeks ago to get a bitcoin per day. Not quite half the price, but I do see a trend developing.
This trend will likely break once some supply of more cost-efficient asic's becomes available for immediate delivery in bulk, possibly the AM cube on the 14th.
October 26, 2013: 778Gh/s gets 1 BTC/day @ a cost of $16900 (13 BFL singles from ebay) ($21.72/Gh/s)
November 05 2013: 1016Gh/s gets 1 BTC/day @ a cost of $22013 (17 BFL singles from ebay) ($21.66/Gh/s)
It was much cheaper in dollar terms just 2 weeks ago to get a bitcoin per day. Not quite half the price, but I do see a trend developing.
This trend will likely break once some supply of more cost-efficient asic's becomes available for immediate delivery in bulk, possibly the AM cube on the 14th.
Today, the first day of the new difficulty, BTC are around $190 on MTGox. But the cost to mine a bitcoin has increased dramatically. Prices of miners have declined but only slightly. I expect they will decline quite a bit more over the next two weeks. Prices of BFL 60 Gh/s singles will have to decline to $951 each (currently $1300) to maintain their previous capabilities in terms of generating BTC per dollar spent.
October 24, 2013: 553Gh/s gets 1 BTC/day @ a cost of $12366 (9.25 BFL singles from ebay) ($22.36/Gh/s)
October 26, 2013: 778Gh/s gets 1 BTC/day @ a cost of $16900 (13 BFL singles from ebay) ($21.72/Gh/s)
October 24, 2013: 553Gh/s gets 1 BTC/day @ a cost of $12366 (9.25 BFL singles from ebay) ($22.36/Gh/s)
October 26, 2013: 778Gh/s gets 1 BTC/day @ a cost of $16900 (13 BFL singles from ebay) ($21.72/Gh/s)
Wow, my math was messed up. Time to show my work:
Each 60Gh/s machine generates nearly .06/ day.
17 machines will generate 1.04/day at 1024 Gh/s (1 Th/s!)
17 machines at $1400 each = $23,800.
That's a lot of cash to get a bitcoin per day for a very limited time. It appears bitcoins are stupid cheap at $200 each.
Each 60Gh/s machine generates nearly .06/ day.
17 machines will generate 1.04/day at 1024 Gh/s (1 Th/s!)
17 machines at $1400 each = $23,800.
That's a lot of cash to get a bitcoin per day for a very limited time. It appears bitcoins are stupid cheap at $200 each.
I think you have it backward. You cannot base value on cost of mining equipment. If mining is unprofitable, so be it. BTC is worth what people will pay for it. It just means people need to stop spending so much money mining. IMHO
Time to rerun the numbers. New difficulty 391648152.
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The Jupiters sell for about $8500 on ebay.
Obviously, the more hash you buy in a single unit the less you pay for the hash. The Jupiters are less expensive per hash than the BFL singles, which are less expensive per hash than the Little singles, which are less expensive than the Jalepenos... etc. The more you are willing to spend the better deals you can get...just like with everything else. I went with the price of singles as a good average across the price/hash spectrum.
Obviously, the more hash you buy in a single unit the less you pay for the hash. The Jupiters are less expensive per hash than the BFL singles, which are less expensive per hash than the Little singles, which are less expensive than the Jalepenos... etc. The more you are willing to spend the better deals you can get...just like with everything else. I went with the price of singles as a good average across the price/hash spectrum.
$12366 is the amount of money a consumer must spend on average today to have delivered to their home within 2 days the 534 Gh/s currently required to mine 1 bitcoin per day (24 hours).
This number was arrived at by using ebay prices for obtaining 60 Gh/s Butterfly units, the cheapest source I could find ($1400 each) for immediate delivery of hash.
I do not have any historical data for cost of immediate delivery of hash vs amount required to mine 1 btc/day, so I consider this the first data point. It is also important to note that every day more hash comes online, meaning that this datapoint is only really valid until the next diff increase, and is only an average of the cost across the entire 2048 diff bracket we are currently in.
While manufacturers can certainly generate hashing units at a far lower cost, I am looking at only what end user consumers must pay.
If others have information on previous datapoints it would be of some value for plotting the trends and someday determining the direction and velocity of the changes, and forecasting future prices of bitcoins.
This number was arrived at by using ebay prices for obtaining 60 Gh/s Butterfly units, the cheapest source I could find ($1400 each) for immediate delivery of hash.
I do not have any historical data for cost of immediate delivery of hash vs amount required to mine 1 btc/day, so I consider this the first data point. It is also important to note that every day more hash comes online, meaning that this datapoint is only really valid until the next diff increase, and is only an average of the cost across the entire 2048 diff bracket we are currently in.
While manufacturers can certainly generate hashing units at a far lower cost, I am looking at only what end user consumers must pay.
If others have information on previous datapoints it would be of some value for plotting the trends and someday determining the direction and velocity of the changes, and forecasting future prices of bitcoins.
If you want to buy my KNC jupiter hashing at 540 gh/s in CGminer for 12k, i wouldn't be opposed to it
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I thought this would be a very interesting assessment. I've heard a lot about people saying to invest in bitcoin rather than mining but yet I haven't seen any solid proof or graphs depicting the exact differences between the two. I know it would be very hard to calculate and display that information considering all the variables and the ever changing price of bitcoin but I'm sure one of the wizards here could.
Mining is a zero sum game. No matter how much or how little the community invests in mining hardware and electricity, the amount of bitcoins they will mine will remain roughly identical. If you invest too much, you will lose money, its as simple as that. OTOH, If Satoshi was still the only person mining on his own PC, its clear he would be making a fortune with essentially zero cost.
GPU mining was highly profitable for a long time, until finally difficulty caught up and we pretty much achieved an equilibrium. We are past that point now, even if no one can give you firm numbers of how much miners invested in asics, because vendors arent opening their books. Compounding the problem is that you are also affected by future sales that havent happened yet, but you know they will happen because of the extreme low marginal production cost of asics.
Still let me try to gather some ballpark numbers for the past 6-12 months, even ignoring the 28nm investment surge. Until recently, BFL was the biggest supplier of hashrate. Josh recently claimed they were responsible for roughly half the network hashrate. Lets say they are only responsible for 1PH that has actually been shipped since April. Their hardware currently costs ~$50/GH. That would mean ~$50M worth of 65nm asics have been shipped. Another way to guestimate this is his claim they shipped 20.000 asic devices. Using a $2500 average of their middle of the road product, that gives you the same number. It wont be correct, but it will be in the ballpark. Now most estimates will also tell you have they are no further than 1/3 of their total backorder, they are still only shipping orders from March, which if true, means they received a total of ~$150M worth of 65nm preorders, most of which arent even operating yet.
Now for the catch; when most of these people ordered their hardware, a bitcoin was worth less than $20. So you could say they invested something the equivalent of 7.5 million bitcoins. Thats more than half of the bitcoins that exist. And considering less than 1.5M bitcoins where mined in the past year by everyone combined, only 1/3 would of which could be attributed to BFL miners, I dont think I need to do the math on whether they will break even when denominated in BTC, or how they fared against someone who bought bitcoins at $20.
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I think it is important to be able to forecast what it might be next month, or even next year,
And just how do you hope to do that without knowing what a bitcoin will be worth?
Its not a chicken and egg problem, its quite obvious that mining difficulty follows price and not the opposite. Its quite obvious that mining equipment is priced at a point that chases mining profitability. Why else do january orders cost half as much as december orders?
If you like regression theory so much, what do you think would happen when we are hit with a 51% attack, making the mining of new bitcoins impossible? Your mining cost will shoot to infitinty, but do you think the price would follow? OR would it crash ? What if Bitfury were to deploy a 100PH private farm tomorrow? Mining cost for everyone else would explode, would it cause an increase of bitcoin price? And what happens if bitfury decides to double it from 100 to 200PH ? THey double their costs and what else changes? Nothing.
Similarly, if SHA256 would be hacked causing the price to crash to nearly zero, dont you think that will have an impact on the price of mining equipment? Or do you think mining equipment will drop in price first and only when mining becomes cheap, the price of bitcoin will follow?
Miners control only a very small amount of the coins traded each day. Something like 1%. How you think they control the price is beyond me.
Strongly agree good post!
I have seen this chicken and egg argument enough times already. It has already been proven through regression theory, at least to my satisfaction. Originally bitcoins were generated with essentially zero cost and had essentially zero value. The first offer of USD for bitcoins occurred at least 6 months before the first dollar was spent on equipment to mine more than what could be achieved by what was just lying around. The value of bitcoins led the expenditure of mining and still does. Mining is an expression of a desire to chase the value of a bitcoin.
There are currently many factors affecting the daily value of a bitcoin. But one cannot suggest that the cost to mine them is irrelevant. They now are in a symbiotic relationship. If the cost to mine bitcoins dropped to zero, the value of the coins would plummet to zero quickly. If the cost to mine bitcoins shot to a trillion dollars, no more coins would be mined and the price of bitcoins would skyrocket. But it is symbiotic as I stated, and works both ways. If I woke up tomorrow and bitcoins were $100,000 each I would go on ebay and buy every single ASIC miner I could get my hands on at current prices, helping the prices of ASIC gear climb to astronomical levels. So would everyone else, regardless of how much it costs the manufacturer to build them. When you berate people who buy them today what you are really saying is that you think that they are overpriced in relation to the current price of bitcoins, and proving my point. When they buy them, they think bitcoins are under-priced and will increase. I am aware of the false dichotomy which states that if you think bitcoins will increase in value, you are better off buying the coins and holding them as opposed to buying mining gear. This is not true for all scenarios. One example is where a sustained drop in global hash leading to decreasing difficulty levels would make mining a superior choice. Another is when you obtain hash rates at prices far below what the average miner can obtain them for. There are others.
I have demonstrated that it currently costs around $12,000 to mine 1BTC/day today. This is not what it cost last month, last year, or two years ago. I think it is important to be able to forecast what it might be next month, or even next year, and I am certain there are plenty of others who would like to know as well.
That is why I want to quantify this relationship. It also works quite well as an answer to people who just spout things like "mining costs do not affect the price of bitcoins" without doing even the most basic research first.
There are currently many factors affecting the daily value of a bitcoin. But one cannot suggest that the cost to mine them is irrelevant. They now are in a symbiotic relationship. If the cost to mine bitcoins dropped to zero, the value of the coins would plummet to zero quickly. If the cost to mine bitcoins shot to a trillion dollars, no more coins would be mined and the price of bitcoins would skyrocket. But it is symbiotic as I stated, and works both ways. If I woke up tomorrow and bitcoins were $100,000 each I would go on ebay and buy every single ASIC miner I could get my hands on at current prices, helping the prices of ASIC gear climb to astronomical levels. So would everyone else, regardless of how much it costs the manufacturer to build them. When you berate people who buy them today what you are really saying is that you think that they are overpriced in relation to the current price of bitcoins, and proving my point. When they buy them, they think bitcoins are under-priced and will increase. I am aware of the false dichotomy which states that if you think bitcoins will increase in value, you are better off buying the coins and holding them as opposed to buying mining gear. This is not true for all scenarios. One example is where a sustained drop in global hash leading to decreasing difficulty levels would make mining a superior choice. Another is when you obtain hash rates at prices far below what the average miner can obtain them for. There are others.
I have demonstrated that it currently costs around $12,000 to mine 1BTC/day today. This is not what it cost last month, last year, or two years ago. I think it is important to be able to forecast what it might be next month, or even next year, and I am certain there are plenty of others who would like to know as well.
That is why I want to quantify this relationship. It also works quite well as an answer to people who just spout things like "mining costs do not affect the price of bitcoins" without doing even the most basic research first.
There must be a correlation between mining costs and coin values. If it cost zero to mine a coin per day the value of BTC would be effectively zero. (reduction to absurd).
One could simply mine as many as they like rather than spend currency obtaining them. On the flip side, if it cost 1 trillion dollars to mine a single coin, the value of a coin would certainly be greater than zero or else no coins would be minted. So long as people continue to mine we must assume the value to be greater than zero.
One could simply mine as many as they like rather than spend currency obtaining them. On the flip side, if it cost 1 trillion dollars to mine a single coin, the value of a coin would certainly be greater than zero or else no coins would be minted. So long as people continue to mine we must assume the value to be greater than zero.
You got it backwards. THe cost of mining doesnt influence the price of bitcoins. In your logic you are ignoring the fact that the network adjusts difficulty automatically, thereby constantly changing the cost of mining 1 BTC per day pretty dramatically. In the end, the cost of mining a bitcoin will roughly equal the value of a bitcoin, but this is due solely due to changing difficulty and will happen no matter at what price bitcoin is or how much a GPU or ASIC costs to produce or to run.
Also you shouldnt look at the retail price of mining gear, that price just represents what idiots who cant do math are willing to pay. Looking at costs of mining gear is looking at it the wrong way, this gear is developed and priced so it can make a profit based on bitcoins price, not the other way. But if you insist, why dont you look at the real costs, ie, production cost instead? By my estimate, a hashfast 400GH asic costs less than $35 to produce. Add PCB, PSU etc, and you may get up to $100 per 400GH tops. Does that mean bitcoin is currently overvalued? Of course not. It just means that HF will make a ton of money and difficulty will skyrocket, thats all it says.
Right now, today, if you have no mining gear and a big pile of dollars, how many dollars would you have to spend to achieve 1BTC/day today?
(For our purposes, we can ignore the two-three-day shipping periods for existing equipment, and will not use pre-orders for equipment not yet built)
What is the cheapest we can do it today?
(Better hurry, in 3 more days it will cost a whole lot more)
(For our purposes, we can ignore the two-three-day shipping periods for existing equipment, and will not use pre-orders for equipment not yet built)
What is the cheapest we can do it today?
(Better hurry, in 3 more days it will cost a whole lot more)
I missed that part sorry. Still, you can pick up Asicminer blades for about 1 BTC right now, brand new, quick shipping, and that is a similar price point as the used stuff on ebay.
40% jump Sunday is gonna make some miners very sad.
Actually, my $12366 was correct, a 60Gh/s miner does about 0.12 per day, not 0.06. Today it is in the $10K -$12K range. Next week the prices of all hardware should depreciate by some percentage, and the price of btc should increase by some percentage. Regardless, I suspect the cost to achieve 1BTC/day should increase, by how much remains to be seen.
Right now, today, if you have no mining gear and a big pile of dollars, how many dollars would you have to spend to achieve 1BTC/day today?
(For our purposes, we can ignore the two-three-day shipping periods for existing equipment, and will not use pre-orders for equipment not yet built)
What is the cheapest we can do it today?
(Better hurry, in 3 more days it will cost a whole lot more)
(For our purposes, we can ignore the two-three-day shipping periods for existing equipment, and will not use pre-orders for equipment not yet built)
What is the cheapest we can do it today?
(Better hurry, in 3 more days it will cost a whole lot more)
I missed that part sorry. Still, you can pick up Asicminer blades for about 1 BTC right now, brand new, quick shipping, and that is a similar price point as the used stuff on ebay.
40% jump Sunday is gonna make some miners very sad.
Right now, today, if you have no mining gear and a big pile of dollars, how many dollars would you have to spend to achieve 1BTC/day today?
(For our purposes, we can ignore the two-three-day shipping periods for existing equipment, and will not use pre-orders for equipment not yet built)
What is the cheapest we can do it today?
(Better hurry, in 3 more days it will cost a whole lot more)
(For our purposes, we can ignore the two-three-day shipping periods for existing equipment, and will not use pre-orders for equipment not yet built)
What is the cheapest we can do it today?
(Better hurry, in 3 more days it will cost a whole lot more)
My use of BFL singles was based upon prices for in-hand units from ebay, not for preorders from BFL.
Although imperfect, ebay is a generally accessible marketplace with price-discovery mechanisms. If people bid them up to around $1400, it is not unrealistic to utilize this as a price-point for purchases.
There must be a correlation between mining costs and coin values. If it cost zero to mine a coin per day the value of BTC would be effectively zero. (reduction to absurd). One could simply mine as many as they like rather than spend currency obtaining them. On the flip side, if it cost 1 trillion dollars to mine a single coin, the value of a coin would certainly be greater than zero or else no coins would be minted. So long as people continue to mine we must assume the value to be greater than zero.
The question that everyone should be asking themselves is "How to we measure and correlate that effect?".
The first step in solving is to look at what terms we need. We need a way to measure mining results. That is why I went with 1BTC/Day, a unit of measure which is independent of difficulty and btc value. 1BTC/day is a fixed unit that does not change.
Then we ask ourselves, what resources are required to generate the 1BTC/Day? What resources were required last week? last month? last year? But more importantly, the real question is: What will be the cost NEXT YEAR?"
If the cost to generate 1BTC/day is twice next year what it is this year, then the component of btc price that is affected by mining results should double as well. The final piece of the formula is finding exactly how much influence this cost has on BTC prices, and whether this influence is increasing or decreasing.
So many questions, so little time...
Although imperfect, ebay is a generally accessible marketplace with price-discovery mechanisms. If people bid them up to around $1400, it is not unrealistic to utilize this as a price-point for purchases.
There must be a correlation between mining costs and coin values. If it cost zero to mine a coin per day the value of BTC would be effectively zero. (reduction to absurd). One could simply mine as many as they like rather than spend currency obtaining them. On the flip side, if it cost 1 trillion dollars to mine a single coin, the value of a coin would certainly be greater than zero or else no coins would be minted. So long as people continue to mine we must assume the value to be greater than zero.
The question that everyone should be asking themselves is "How to we measure and correlate that effect?".
The first step in solving is to look at what terms we need. We need a way to measure mining results. That is why I went with 1BTC/Day, a unit of measure which is independent of difficulty and btc value. 1BTC/day is a fixed unit that does not change.
Then we ask ourselves, what resources are required to generate the 1BTC/Day? What resources were required last week? last month? last year? But more importantly, the real question is: What will be the cost NEXT YEAR?"
If the cost to generate 1BTC/day is twice next year what it is this year, then the component of btc price that is affected by mining results should double as well. The final piece of the formula is finding exactly how much influence this cost has on BTC prices, and whether this influence is increasing or decreasing.
So many questions, so little time...
"Price and difficulty do not follow each other"
you mean nobody found a relationship between them yet, doesn't really mean it doesn't exist
you mean nobody found a relationship between them yet, doesn't really mean it doesn't exist
So... you've figured it out and are going to share it with us? Or, no one has found that relationship, so the answer to your last question, is still... surprise! no!
"Price and difficulty do not follow each other"
you mean nobody found a relationship between them yet, doesn't really mean it doesn't exist
you mean nobody found a relationship between them yet, doesn't really mean it doesn't exist
So, given all this data, how could we compute the best price for a BTC in current mining conditions?
Since the price or difficulty do not follow each other, no.
And why are you assuming that BFL can deliver a product for that amazing price, and have it delivered before the next, say 4, 5 or 6 difficulty changes. By the time you sink 10 or 20 grand into generating 1 BTC a day, you probably won't generate 0.1 a day by the time they deliver.
A better estimate, if you are trying to calculate it this way, would be someone who can deliver in 2 business days. That would probably be AM miners, but your cost is going to be higher.
So, given all this data, how could we compute the best price for a BTC in current mining conditions?
You can get 534 GH/s at roughly 0.09 BTC per GH/s right now on cex.io (counting in some slippage with a large order). With current BTC/USD price of $200, that's $9612.
Yeah, but in my revised (unscrewed up calculations) you need right at 1 Th/s for 1 btc/day. So:
1000 Gh/s * 0.09 btc * 205 $/btc = $18450 for 1btc/day. Plus or minus a little here and there. Better than buying BFL singles on ebay, but still pretty pricey for coins.
What? But you'll mine more than 1! maybe 30~
You can get 534 GH/s at roughly 0.09 BTC per GH/s right now on cex.io (counting in some slippage with a large order). With current BTC/USD price of $200, that's $9612.
Yeah, but in my revised (unscrewed up calculations) you need right at 1 Th/s for 1 btc/day. So:
1000 Gh/s * 0.09 btc * 205 $/btc = $18450 for 1btc/day. Plus or minus a little here and there. Better than buying BFL singles on ebay, but still pretty pricey for coins.
You can get 534 GH/s at roughly 0.09 BTC per GH/s right now on cex.io (counting in some slippage with a large order). With current BTC/USD price of $200, that's $9612.
Wow, my math was messed up. Time to show my work:
Each 60Gh/s machine generates nearly .06/ day.
17 machines will generate 1.04/day at 1024 Gh/s (1 Th/s!)
17 machines at $1400 each = $23,800.
That's a lot of cash to get a bitcoin per day for a very limited time. It appears bitcoins are stupid cheap at $200 each.
Each 60Gh/s machine generates nearly .06/ day.
17 machines will generate 1.04/day at 1024 Gh/s (1 Th/s!)
17 machines at $1400 each = $23,800.
That's a lot of cash to get a bitcoin per day for a very limited time. It appears bitcoins are stupid cheap at $200 each.
But your numbers ignore the fact that BFL is way overpriced. You can get 1 TH/s for $10k.
Where can you get 1 Th/s delivered immediately for $10K? I am intentionally ignoring any pre-order offers because in every case the diff will change before they are ever delivered and brought online.
Wow, my math was messed up. Time to show my work:
Each 60Gh/s machine generates nearly .06/ day.
17 machines will generate 1.04/day at 1024 Gh/s (1 Th/s!)
17 machines at $1400 each = $23,800.
That's a lot of cash to get a bitcoin per day for a very limited time. It appears bitcoins are stupid cheap at $200 each.
Each 60Gh/s machine generates nearly .06/ day.
17 machines will generate 1.04/day at 1024 Gh/s (1 Th/s!)
17 machines at $1400 each = $23,800.
That's a lot of cash to get a bitcoin per day for a very limited time. It appears bitcoins are stupid cheap at $200 each.
But your numbers ignore the fact that BFL is way overpriced. You can get 1 TH/s for $10k.
Wow, my math was messed up. Time to show my work:
Each 60Gh/s machine generates nearly .06/ day.
17 machines will generate 1.04/day at 1024 Gh/s (1 Th/s!)
17 machines at $1400 each = $23,800.
That's a lot of cash to get a bitcoin per day for a very limited time. It appears bitcoins are stupid cheap at $200 each.
Each 60Gh/s machine generates nearly .06/ day.
17 machines will generate 1.04/day at 1024 Gh/s (1 Th/s!)
17 machines at $1400 each = $23,800.
That's a lot of cash to get a bitcoin per day for a very limited time. It appears bitcoins are stupid cheap at $200 each.
$12366 is the amount of money a consumer must spend on average today to have delivered to their home within 2 days the 534 Gh/s currently required to mine 1 bitcoin per day (24 hours).
This number was arrived at by using ebay prices for obtaining 60 Gh/s Butterfly units, the cheapest source I could find ($1400 each) for immediate delivery of hash.
I do not have any historical data for cost of immediate delivery of hash vs amount required to mine 1 btc/day, so I consider this the first data point. It is also important to note that every day more hash comes online, meaning that this datapoint is only really valid until the next diff increase, and is only an average of the cost across the entire 2048 diff bracket we are currently in.
While manufacturers can certainly generate hashing units at a far lower cost, I am looking at only what end user consumers must pay.
If others have information on previous datapoints it would be of some value for plotting the trends and someday determining the direction and velocity of the changes, and forecasting future prices of bitcoins.
This number was arrived at by using ebay prices for obtaining 60 Gh/s Butterfly units, the cheapest source I could find ($1400 each) for immediate delivery of hash.
I do not have any historical data for cost of immediate delivery of hash vs amount required to mine 1 btc/day, so I consider this the first data point. It is also important to note that every day more hash comes online, meaning that this datapoint is only really valid until the next diff increase, and is only an average of the cost across the entire 2048 diff bracket we are currently in.
While manufacturers can certainly generate hashing units at a far lower cost, I am looking at only what end user consumers must pay.
If others have information on previous datapoints it would be of some value for plotting the trends and someday determining the direction and velocity of the changes, and forecasting future prices of bitcoins.
Unless the manufacturers have paid off their NRE costs, you may have to amortize it.
$12366 is the amount of money a consumer must spend on average today to have delivered to their home within 2 days the 534 Gh/s currently required to mine 1 bitcoin per day (24 hours).
This number was arrived at by using ebay prices for obtaining 60 Gh/s Butterfly units, the cheapest source I could find ($1400 each) for immediate delivery of hash.
I do not have any historical data for cost of immediate delivery of hash vs amount required to mine 1 btc/day, so I consider this the first data point. It is also important to note that every day more hash comes online, meaning that this datapoint is only really valid until the next diff increase, and is only an average of the cost across the entire 2048 diff bracket we are currently in.
While manufacturers can certainly generate hashing units at a far lower cost, I am looking at only what end user consumers must pay.
If others have information on previous datapoints it would be of some value for plotting the trends and someday determining the direction and velocity of the changes, and forecasting future prices of bitcoins.
This number was arrived at by using ebay prices for obtaining 60 Gh/s Butterfly units, the cheapest source I could find ($1400 each) for immediate delivery of hash.
I do not have any historical data for cost of immediate delivery of hash vs amount required to mine 1 btc/day, so I consider this the first data point. It is also important to note that every day more hash comes online, meaning that this datapoint is only really valid until the next diff increase, and is only an average of the cost across the entire 2048 diff bracket we are currently in.
While manufacturers can certainly generate hashing units at a far lower cost, I am looking at only what end user consumers must pay.
If others have information on previous datapoints it would be of some value for plotting the trends and someday determining the direction and velocity of the changes, and forecasting future prices of bitcoins.
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