Topic: bitcoin home mining opportunity cost! - page 2. (Read 1019 times)

of course if the op had asked can I mine well enough to use the profits to hodl coins he wold have shown full understanding to the following statement:

If I dedicate myself into spectacular world class pussy eating of my girlfriend will she in turn become a great
cock-sucker.

Honestly the answer is if you pick the right pussy to eat you will get great paybacks from the owner of that pussy.

Much like if you properly understand mining for the tool that it is to gain great profits for your self.. In coin and in fiat

But I digress and obviously I am in a holiday mood with very good results in mining for all of 2021 and being married happily for over 30 years.

I can say 2021 has been the best of both worlds.

but if you pick some other years not so good.

Nothing in this post is a financial / tax advice and I am not a financial / tax adviser. That being said,

I agree with phillipma here that we are trying to compare 2 activities that are not comparable to begin with.

Bitcoin mining and buying and holding bitcoin are not the same thing. One is a business the other is just investment.

Just like

1. Gold mining and investing in holding gold are 2 different activities.
2. Being an apartment owner yourself/ through your company and buying stock in REIT and holding real estate expecting it to increase in value are 3 different things. Although REIT passes on nearly all of its cash flow it is still not same as actively being involved in apartment business.

Bitcoin mining is a business. The business is to mine and sell bitcoin, pay for the expenses and earn profit if possible. If bitcoin is retained after mining then that is an investment decision made by the business. Why are you expecting accounting profit from this business every day? Did gold miners make accounting profit everyday in their existence? How about iron ore miners? Do all companies generating income produce accounting profit? Do you have any small business? Do your other businesses always make profit every month and year? Why are you stopping mining the moment the mining is not profitable? If your rental property is vacant or earning lower rent than expenses or in repair for few months do you sell it? If prices go down after you bought bitcoin from exchange will you immediately sell it? This whole comparison makes no sense to me.

Investment gains / loss / financing/ taxes and business gains / loss / financing/ taxes are 2 completely different things and are treated differently by the regulatory authorities as well.

Should I eat my girlfriends pussy or pay a whore to get my cock sucked?

WTF am I talking about?

Simple you can't really compare the two actions in my statement.

And you can't really compare the two actions in your statement.

"Nuff said". 


btw op tell me the source of that quote "nuff said" if you can please.

I would go on both numbers in different directions, since I'm spending quite a lot of time reading topics outside the mining area that still bring the mining into the discussion when it comes to ways of acquiring bitcoins I've seen an overwhelming majority being against mining as a source of income and labeling it more like a high cost high risky business. But at the same time, I would think that the number of "rational" miners would be far lower, especially if we cut the part of mining that relies on investor money and big guys who have a totally different cost structure than the average Joe. And I highly doubt too many of them would still fit the description of "home miners".


Probably, I'm completely biased sometimes, I put my personal experience upfront and then start from there, I'm way less connected to the mining gear market and prices so again, I might get fewer balls in the net than him but that doesn't make it a rule for every gear and every period and every electricity costs. If you have a parabolic price that goes x5 in a year it's pretty hard to compete with but those times won't repeat themselves over and over while mining will still be profitable, for some.

While the sample size could be cherry-picked, if you were to compete with him on cherry-picking samples, you would run out of data long before he does.

While I don't maintain a similar excel sheet as OP does, I follow the mining gear prices every day, I did many "backtests" and I did run the numbers a dozen times before and it was almost ALWAYS a failure for miners as long as your base unit of profit/loss is BTC NOT fiat.

If it's just pure fiat calculation then for the most part mining is more profitable because in general betting on BTC against fiat has always been profitable given that the duration of the sample is long enough.

So really, it's rather personal to some degree, but what most people fail to understand when investing in mining is that they have the wrong mindset about what mining actually is, on paper, it does seem like a great way to extract BTC forever, so instead of buying x amount of BTC, why not buy a miner that keeps "printing" BTC forever, people view mining as a less risky or even risk-free investment, they also think of it as a passive income.

If you ask any random person if they wanted passive income + low/risk or risk-free business, most of them will sign up, the majority of people "mistakenly" view mining as low risk and passive income whereby in reality it really isn't, I think if 50% of miners were rational about their investments - total hashrate as of today would have been cut by half, but most people just invest in things they don't understand, or as you once said, "they gamble with investors money".

Thanks I used simple formula to get the daily reward https://moneyqanda.com/bitcoin-mining-profitability/

All in all, what i feel is miners are very costly right now and it makes sense to buy BTC instead of investing a miner as in all likelihood you'll not be able to recover the ROI in BTC, you might very well recover you ROI in USD but if the risk associated is same in both options you could just buy bitcoins and sit back and relax 

I'm looking at your excel, but what am i seeing here?
I don't see the difficulty being brought into your equation to begin with (and inserting this is a no-brainer....). I see a column "BTC / Mean Hash Rate" in your DailyBTCdataFrom09Jan2009 tab, and this column is appearing in your other tabs aswell... But the number fluctuates each and every day whilst the difficulty is adjusted every 14 days...

If you want the real number, what you should do is use the formula
BTC earned per day = Block Reward / (Difficulty * 2**32 / hash rate / seconds in a day) (source: https://bitcointalksearch.org/topic/m.8233023)

So, you'll have to do this calculation for each and every day, then convert the BTC earned per day into USD (or EUR, or Yen, or ....) and substract the electricity price.
You'll have to repeat this for every single day:

• the block reward costsists of the coinbase reward plus the sum of the transaction fees of every transaction in this block... you can take the average per day
• the difficulty stays the same every 2016 blocks, but then it is readjusted
• your hashrate stays the same
• the number of seconds in a day stays the same
• the exchange rates changes constantly... you can take the average exchange rate for that day

Let's make an example entry for an S17 on the 1st of januari 2020:
BTC earned per day = Block Reward / (Difficulty * 2**32 / hash rate / seconds in a day)

• On this day, the coinbase reward was 12,5 BTC/block . When we look at blocks like https://www.blockchain.com/btc/block/610700 and look at some earyer and some later blocks, we see an average fee of ~0.2 BTC/block (guesstimation, not actually calculated). This brings the block reward to 12.7 BTC/block.
• On this day, the difficulty was 13,691,480,038,694 (https://btc.com/stats/diff)
• An S17 hash a hashrate of 56 Th/s while drawing 2200 Watts (that's 56.000.000.000.000 hashes/s)
• A day has 86400 seconds

BTC earned with a S17 on the 1st of januari 2020 (on average) = 12.7/(13,691,480,038,694 * 2^32 / 56.000.000.000.000 / 86400)
BTC earned with a S17 on the 1st of januari 2020 (on average) = 12.7/12153.7
BTC earned with a S17 on the 1st of januari 2020 (on average) = 0,00104495

https://coinmarketcap.com/historical/20200101/ says Bitcoin's price on the first of januari 2020 was $7200/BTC
This means your gross income was $7200*0,00104495 = $7.5

Your machine is drawing 2200 Watts 24 hours per day, that's 52.8 KWh (let's round it to 53).
You pay 7 cents/Kwh... 0.07 * 53 = $3.71.

Your net income for the 1st of januari 2020 would have been $7.5 - $3.71 = $3.79.
That's about 20 cents more than you calculated... Not much, but still significant, especially when you're doing this calculation for 818 days (818 * 0.2 = >$160).

What i also mis is the resell value of the hardware... I'd personally rather sell off my ASIC than turn it off for many months on end...

Let's pick a random date, a single miner, and a random electricity price and draw conclusions for everything

How about we start with the situation at the time you described, difficulty was 1/4 reward was double per block price was 1/15.
Revenue would have been around $2.80, electricity costs 2.30$ so net profit would have been 0.50 cents per day looking at a 400 day ROI, not even mentioning that just after the ROI period the halving would happen, and besides, the gear was already 2 years old.
So, three years later you've arrived at the conclusion anyone could tell you from the start if BTC skyrockets in price it would be better to buy coins that mine in these conditions.

From this to generalize about everything it's a long way.


And the water might be wet ....yet everyone still takes a bath (mines).
I applaud the effort for the calculations but that doesn't mean I agree with the conclusion.

Here's the detailed calculation i've done for S9, S17 and S19 Pro 110

https://docs.google.com/spreadsheets/d/e/2PACX-1vRHvpRQHtRPXLy9jQcp4lQnIyknfbU4K0I5Tli8eLYzvscYkduXz_QlqepEEccK0pDX4lVtTRCOhbwO/pub?output=xlsx

For all miners I have taken the price from the first listing on the Telegram Hardware market place https://t.me/Hardwaremarketchannel

I did not redo your calculations so i cannot comment to these exact numbers (you didn't post your exact calculations, so there's no way to verify), but the general idear behind your post might be more or less correct, eventough those 0.041 BTC sound very low to me. In 2018, was this ASIC the price/quality best asic around, or were you looking for the cheapest device? Cause, normally, @7 cents/Kwh, i always believed you should have recuperated your investment if you picked the right asic from the right vendor at the right time and you had an average amount of luck. But once again: it's not impossible that your numbers are correct... You just posted the end result of your calculation, but not the steps and reasoning in between.

I've read, and discussed with, several people claiming it's a good idea to keep mining at a loss because bitcoin's value generally rises over the years... My opinion is that you are correct: you should turn off your equipment if mining at a loss... There is no good reason behind mining at a loss to begin with... Just turn off your equipment and buy BTC from an exchange with the money you would have spent on electricity for as long as it takes untill mining becomes profitable again. You'll end up with more BTC in your wallet this way than if you'd had continued mining.

And that's exactly the answer to your last point: yup, you would be in the profit $600+, but if you'd invested the money for buying your ASIC and the money you'd invested into electricity into buying BTC directly, what would the end result have been?

Would be glad to be proved wrong but unless you can recover your investment in short span of time you may never earn back the amount of bitcoins you could have bought with the initial investment in the miner…

Eg S9 was available for usd 195 (0.058 btc) in December 2018… from that date to till date if you had mined bitcoin for everyday when it was profitable and shut it down when it wasn’t profitable to mine you would only have earned back 0.041 btc @ 7 cents kWh.

Btw in USD terms you would in profit of 600+

I used historical btc data from coin metrics.io and miner price from kaboomracks market place on telegram