Topic: Do any of these ASIC's actually make a ROI? (Read 3461 times)

Pig Farms and Miners Unite.

Free electricity and shit might be the right way to go.

When BFL began the "two more weeks" campaign back in fall of 2012, there were zero ASICs in the market. It wasn't until early 2013 that Avalon and ASICMiner began to deliver. Since that time, we have seen BFL actually deliver some product and Bitfury roll out a lot of chips to their customers. KNC and CoinTerra also look likely to deliver some product.

It is therefore very unlikely that the hash rate will stagnate like it did in the fall of 2012. In fact, BFL could stop delivering completely and it probably wouldn't dent the growth rate.

The 7950 can mine litecoins and other coins. So even when ASICs did finally get shipped, GPUs by then had a work-around in place to extend their profitable life.

So again just because marketers claim one thing will be obsolete in two weeks does not always mean they are right.

By the time the two weeks rolls around, especially if it turns out to be a lot longer than two weeks, things can change.

Some private farm could be about to turn on massive numbers of already-built 28nm chips, we just don't know and cannot know.

But historically the FUD-trolls claiming in "two weeks" this that or the other old tech would no longer make profit have been wrong.

We wasted a year not buying mining gear because in "two weeks" BFL's superior product would arrive.

We wasted how much of what thinking Avalon would ship chips in 8 to 10 weeks.

-MarkM-

I mean the margin on GPU was less for ATI than what ASIC manufacturers are taking right now. I'm not saying buying GPU is a better investment than buying ASIC but it was when there was no ASIC.

Today, manufacturers are squeezing maximum profit out of miners. This leave the miners vulnerable for when a vendor will choose to lower his selling price since their margin is so high and they need to compete.

How could Avalon sold their batch #1-2 at $1500 when batch #3 was like $10K+? Someone is making a killing there and it's not the miners. Even BFL raised their price and lowered their Gh/s on their "products" after the April hype.

It's how they soothe the pain of loss. It hurts when you make an investment and lose. Deep down they know they lost. But if they can pretend like they made a profit, they won't feel as bad.

Really?  a 700MH 7950 at $300 is $430/GH.   A bitfury asic today at the expensive rate of $108 is $40/GH.  In october, when they're closer to $25, they'll be under $10/GH.

I think the problem is that ASIC are way overpriced compared to GPU. This combined with the April hype make most (if not all) ASIC a bad investment. When, I first started mining in early 2012 it was possible to get more BTC then invested solely buying GPU if your electricity cost was low and you knew how to optimise your rig.

The biggest problem in guessing whether there will be ROI is all the bullshit and all the delays.

A long long time ago it was clear that GPUs would not make ROI because BFL was going to ship ASICs in "two weeks".

Somehow nonetheless people still keep managing to make money with GPUs.

So mostly I guess it depends on whether you actually believe that any or all of the vapourware that has been announced is going to ship.

For a long long time people who ignored all the speculation about supposedly to be shipped in the future hardware have done rather well going ahead and buying stuff that would not have made ROI had all the vapourware actually been shipped "on time".

Any of these ASICS can probably make ROI if none of the others end up actually shipping, or if they get delayed long enough.

Even USB block eruptors started looking a lot better once Avalon turned out not to be shipping chips than they had looked back when people imagined Avalon was going to ship "on time".

-MarkM-

Which has absolutely nothing to do with the topic "Do any of these ASIC's actually make a ROI?"

There are lots of non-ecnonomic reasons to mine.  There is a difference between saying "if you don't make a profit you are stupid" and saying "the claim you are profitable even if you lose BTC (100 BTC to buy a miner which nets 99 BTC) because the exchange rate might go up is stupid".

I'm still trying to figure how Josh and al. justify buying a mining device that will mine less BTC than it's price in BTC but I can't.

I really tried hard to understand their logic but that doesn't make any sense to me.

I should point out that the topic is "Do any of these ASIC's actually make a ROI?" and not "Should I mine at all?"

Well its silly to argue anyway I guess since I do want to mine and do still want my Klondike 16 boards built and so on and so on.

I should just jump on the bandwagon telling everyone hell yeah mining won't pay, mining is for idiots, forget mining, if you think crypto coins are good buy them but don't waste your time screwing around with this whole mining thing.

I am partly influenced personally by the fact I made far more CPU mining BBQcoins, a purportedly worthless coin, than I did on any other coin. So to me the ability to mine coins nobody is selling has proven itself to be the most profitable approach, historically.

Really it was all the actual time and thought I put in that paid, no turnkey buy it and plug it in magic box made me my profits, I profited by having the skills, time and equipment to work the outer edges the masses would not or could not.

-MarkM-

Of course, you could convert your BTC to USD and then to lottery tickets if you thought the lottery would return more than just holding BTC. That is still more than just 1 bet. First you have to bet that the USD/BTC exchange rate will not fall. Second, you have to bet that your lottery odds will pay off. The second bet has nothing to do with mining and should not be considered as part of the mining payoff.

Launching a whole new cryptocurrency based on SHA256 is also a risky proposition and involves many unknowns. It is true that you could profit from doing so, but that is not the same as saying you should count on such a thing happening as part of your value proposition.

Similarly, playing the market in electricity caries risks as well. Some enterprising soul at MIT might discover a cheap to manufacture highly efficient solar cell that provides cheap and limitless power for the entire human race. This would disrupt all previous methods to produce electricity and would make stockpiling electricity pointless.
 

The value of those coins are essentially zero.  I know you are the merged mining champion and merged mining is the solution to all problems but it doesn't change the economics.

Currencies are fungible so anytime someone says x BTC just think of it is as BTC equivalent.  If you mine 5 coins and their combined value is x BTC then it is no different than mining x BTC.  If you don't like to use BTC consider the five coins as x DVC equivalent or x XYZ equivalent.  It doesn't change anything.

If you spend 100 BTC on a rig that will produce <100 BTC equivalent (even including the rounding error merged mined coins) then you have a negative ROI.  
It doesn't matter if your intent is to makes lots of USD or buy lots of porches with the proceeds.  If you want lots of USD then 100 BTC is better than <100 BTC.
It doesn't matter if you spend USD, BTC, ounces of gold, or DVC.  The unit mines produces (mainly) BTC so however you pay it has an equivalent price in BTC.


Saying I will spend 100 BTC to mine 99 or less BTC (including the value of the near worthless merged mined coins) and it doesn't matter because I only care about USD makes no sense.  It doesn't matter what the future exchange rate is. 

Future exchange rate drops to $10 per BTC
Hold 100 BTC = 100 * $10 = $1,000 
Buy miner for 100 BTc and mine 99 BTC = 99 * $10 = $990
100 BTC is better than 99 BTC
$1,000 is better than $990

Future exchange rate drops to $1,000 per BTC
Hold 100 BTC = 100 * $1,000 = $100,000 
Buy miner for 100 BTc and mine 99 BTC = 99 * $1,000 = $99,000
100 BTC is better than 99 BTC
$100,000 is better than $99,000

Bitcoins are irrelevant though, if it is dollars, or geistgeld, or icecream cones or whatever that you are after.

Heck you could look at it all from the point of view of a person who has electricity to spend instead of a person who has fiat or bitcoins or geistgeld or whatever to spend.

I have a certain amount of electricity and I want to turn it into more electricity.

I could buy a device that can mine any SHA256 coin or even merge a bunch of SHA256 coins, and use it to burn electricity to produce stuff I can sell for more electricity than I put into it.

This fixation on bitcoins ignores the versatility of the device, heck I could launch a whole new SHA256 coin to mine with the device if I thought that would buy me more electricity than mining some already existing SHA256 coin...

-MarkM-

There is still the argument that the network needs to be protected by as many people as possible, mining, ideally not in pools but still ok if many pools exist. BTC sitting in cold storage is only worth $$$$$ if the BTC network is alive and healthy. So there is a feedback loop justifying mining without even hitting ROI as it helps protect the value of the same miner's BTC stash.
 

There is one good reason. That reason is to determine if they overpaid for their BTC. If someone today paid $10,000 per BTC, you would laugh at him. He would patiently explain to you that BTC would always rise with respect to USD and therefore he was sure to make his money back. Sure enough, 2 years later the price of BTC cracks $10,000 and that same individual then gloats endlessly about his $10,000 BTC that have finally returned a positive ROI. You try to explain to him that he could have bought his BTC for $140 each, but your explanations fall on deaf ears because at that point he refuses to engage in "judgement by hindsight".

1) You presume that BTC will always rise with respect to USD. If BTC drops back to $5 each, then no you will not earn a positive ROI when only measured in USD.

2) BTC does not vary with respect to time to USD, it varies with respect to market sentiment. BTC can rise slowly or quickly, and it can fall slowly or quickly, and it can remain the same price for extended periods of time.

3)There is in fact no guarantee at all that BTC will ever attain a $250 exchange rate again. For instance, BTC 2.0 could come out with vastly improved features that causes everyone to migrate to the new currency. Or a fatal flaw in the math could result in the total debasement of BTC as a store of value.

Yeah but similarly there is presumably no rational explanation for measuring a device which produces i0coin, groupcoin, coiledcoin or geistgeld in any other unit other than one of those.

For a lot of people these devices are devices which produce dollars, thus to them there is no good reason for measuring them in any unit other than dollars.

They might not care at all whether they end up on any given day merged mining all the merged mined coins, or mining one of the standalone SHA256 coins, and will be willing even to change what they mine from day to day depending on which coin or merge of coins offers the most dollars that day.

If I pick just one SHA256 coin to buy, instead of buying a device that can mine any of them or even mine many of them all at once, I am less diversified.

If I buy some of each, even in proportion to what various statistics tell me I could mine of each right now, I still have to worry about whether today it happens to be better to mine, and thus, presumably, to buy, a standalone SHA256 coin that cannot be merged or some particular merge of many types of coins. Since I have to worry anyway about which coin or merge of coins happens to be best on a given day I already am having to track what would be best to mine, so even if I decide to buy instead of mining I already face all the work a miner needs to do of tracking exactly what specifically to mine from day to day or hour to hour.

Plus if I buy there is a paper trail showing which bitcoins I own in many cases or at least in some cases, so by buying I could end up weakening the pseudonymity that some regard as part of the appeal of bitcoin in the first place.

Further, lets say I do decide that I want to buy thousands of coiledcoins and geistgeld each day instead of merged-mining them, where do I buy them?

If I had bought instead of mining, where would I have bought my hoards of i0coins and groupcoins that, thanks to (merged) mining instead of buying, I accumulated in the period during which neither was on any exchanges?

-MarkM-

The only time profits will come again is when hardware companies charge resonable rates for their hardware. Until people stop buying their hardware at these ridiculous mark ups, its almost useless buying a miner unless bitcoin skyrockets.

Think about this KNC is going to cut their prices almost in half in October, that only shows they are charging insane mark ups on their products. It probably costs them $100max, say worst case $500 to produce a unit, they sell that unit for 10x-15x more. These guys have profit margins of 1000-1500%!!!

Its like Apple selling its iphones for $5, 000, in the real world this would never happen, in the bitcoin world with retards abound its common practice.