Problem is even with the coupon they are way too expensive.
I calculate that you need both $950 price and $587 BTC ($200 higher) to reach breakeven in ~4 mo.
We urgently need 50% difficulty fall like in 2011; the cycle could continue at that point, otherwise almost all home-based miners will NOT order latest and greatest equipment above $500.
However, as ckolivas had noted, home-based miners are just 15% of the network, so nobody would really care if home-based miners would become 5-10% or even less.
You have to remember that most manufacturers order chips in 6 or 7 figure quantities, so IF there is going to be a difficulty reduction then it takes time to propagate though - several months sometimes. That reduction / reduction in growth then gets hidden by the constant deployment so you never see the reduction in the first place.
And here lies the conundrum. Manufacturers ordered chips, hence they are committed to the product, but there is a lack of demand at low BTC prices.
Therefore, the only choice would be for manufacturers to deliver poduct to themselves into the data center.
However, they will then continue selling all bitcoin they mined to pay for ordered chips, facility, salaries, etc. Such selling would further depress bitcoin-and the viscious cycle continues.
How to get out of a cycle: you tell me, but I see only one possibility: closing down of many manufacturers operations.
Incidentally, how many Q3 mini-Neptunes at 1.5-1.7 TH for $3.5K was KNC able to sell? I bet the number is somewhere between zero and 100-200 (optimistically).
The only thing for it is a spike in
external demand.
Like what happened in May 2013:
With Cyprus banking crisis, Bitcoin hits record exchange values [...] up nearly 350 percent in the past two months, thanks largely to uncertainty in Europe's banking community.
http://www.cnet.com/news/bitcoin-hits-record-exchange-values-with-cyprus-banking-crisis/and again in November 2013:
The Motley Fool: A Very Bitcoin Thanksgiving -
http://www.fool.com/investing/general/2013/11/28/a-very-bitcoin-thanksgiving.aspx Bitcoin price quadruples after Fed Chairman's supportive words (the "Bernanke bump") followed by a very positive congressional hearing on virtual currencies
The network difficulty increases have been amazingly flat lately. Now if the price would just do a 4 or 5 banger, I'd be a very happy
miner investor.
I too take ckolivas's view very seriously -- and have decided to convert some mining hardware back into bitcoins asap. The btc price has taken a long slow dive this year, from last Thanksgiving's dizzying height's, and I do think the coin of the realm is now positioned to yield a lot more ROI than the machinery that digs them up out of the the dark depths of the mathematical coal mines...
thanks,
-dave
And thanks, Slush for your Facebook Cover Photo, that I see in my head now every time I think of "Bitcoin Miners"
Don't you just love these guys, and want to be them, with their hard work all over their dirty faces, and then want them to become just rich as hell?